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We all know those people who will drive for half an hour to save a cent per litre of gas right? And there are a couple of problems with this. The first is how much gas are they wasting to save that cent, and the second is that they obviously put very little value on their own time. That’s fine as long as it’s their own time.
What about when it’s your job as the purchaser in your office? Is it really worth it for you to leave the office, drive to the store to pick up those few cleaning supplies because they are on sale? How much time does that take? Have you factored that into the overall cost of these items? How about the lost productivity that occurs when you leave your office to get these items? While you are waiting in line at the checkout what other items on your to do list could you be taking care of?
This doesn’t even begin to factor in the accounting costs for purchases. Did you know that there is a cost to process every invoice that comes into your business? Think about it. Each and every invoice, or petty cash slip needs to be handled by the bookkeeper, and then payment issued for each. How much does this cost? Well it can take anywhere from $5 to $25 to process an invoice depending on the organization. Even if your companie's processing costs are on the lower end of that spectrum, the dollar or two that you saved by running down the street is eaten up.
Here are some pointers when it comes to purchasing and suppliers.
· Find suppliers that can meet as many of your needs as possible, that way your bookkeeping team will have fewer invoices to process
· how easy it is to purchase from them? Do they have a website or is calling in the order easier? Which method suits your work habits best?
· How easy are they to deal with? Is it possible to develop a relationship with them that will make your interactions with them smoother?
· How about returns? Can you just call this supplier up to make a return or will you have to repackage the items and then deal with arranging shipment back to them.
· Think about price, but don’t make it the overriding factor. No one company can have the best price on everything all time. You will waste a lot more money chasing the lowest price than you will gain.
In summary keep efficiency in mind. How quickly and effectively can you deal with this “to do” so that you can move onto the next item on your list? That is adding value to your company and making you an asset in it.