Do you have a handle on your indirect spend?
Today’s post is by Ronald D. Southard, CEO at SafeSourcing Inc.
Are you working to control all costs. Simply, that would be Cost of Goods which impacts your gross margin. Or it could be indirect spend that will impact net earnings. Or are you focused on capital, which is really the spending controlled by the emperor. Minus the humor, you should be focused on all three if you want to please all stake holders.
So, what is indirect spend?
Indirect goods and services are any purchases that do not end up in the product or service delivered to the customer. These are not only necessary expenditures to support the deliverable product or service but are also shared across the entire business organization. Examples of indirect goods and services might be interest expense, depreciation expense, costs associated with preparing and presenting proposals, administrative expenses, etc.
Here are some indirect items in retail that are all showing surprising reductions in cost right now.
- Lawncare
- Firewood
- Cleaning Services
- Waste Removal
- Ice Programs
- Beer Caves
- Facia
- Lighting
- Floor Tiles
- Ceiling Tile
SafeSourcing is an eprocurement company that operates across multiple industries. As such we have specific experience in almost any commodity, service or capital related spend. Our SafeSourceIt™ Global Supplier Database has over 500,000 suppliers that can reduce your costs today. You are paying too much for about everything. To learn more, please contact a SafeSourcing customer services associate.
