Procure to Pay analysis requires careful planning Part II of II.

June 19th, 2015

In yesterdays post “Procure to Pay analysis requires careful planning Part I of II” we...

 

Todays post is by Ronald D. Southard, CEO at SafeSourcing Inc.

In yesterdays post “Procure to Pay analysis requires careful planning Part I of II” we began to answer a customers question as to were they actually getting all of the savings from the low quotes in their online RFX process.

Here is an example of what might happen or actually does more often than not as result of the actions in yesterdays post.

If we come up with the math from yesterdays scenario, it takes a full quarter to execute which is not a stretch at all. Unfortunately your incumbent supplier was not selected and your contract with them expired 5 weeks ago. Now your out of contract costs are now up by 5% for the last five weeks because you are not so important to this supplier any longer. So not only has your existing price gone up for the last 5 weeks, you lost the opportunity to buy the product from your new supplier at 20% less over the same five weeks. These combined costs now erode your total estimated savings with your new supplier who you probably have not even added to your accounts payable system which will also result in late fees.

Ask your e-procurement solution provider how they can help you with this process. Or, please contact a SafeSourcing Customer Services Account Manager in order to learn more.

We look forward to and appreciate your comments.

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