How to Approach Indirect Costs in the Retail Industry: Part 4

In the fourth of the 4 part series, we will dive more deeply into the third possible approach to finding savings in indirect goods and services:  Organizational Assessment.

How are indirect goods and services being purchased currently? How does your organization stand up against best practices? 

Map your existing organizational procure-to-pay processes and assess them against leading companies. Which areas can you make more efficient and automated? Can you reduce errors and cut cycle time?
 Key to success: Once you have a good understanding of your opportunities, you can create a custom source to settle organization. Among the questions you should answer:  Will a corporate finance organization source key contracts and let the field organizations make the actual purchases or will the corporate function establish methodology and processes to uphold a corporate standard? Which categories will utilize a centralized contract? Who will receive and pay invoices?

End Game:  Create a custom solution based on your organization’s culture and needs.  Look at alternatives from a corporate finance function from providing information and analysis, setting standards or a more comprehensive sourcing function.

Slay Cerberus & Bring Savings to Your Bottom Line
By actively planning and custom-creating a solution – one based on your company’s culture and history – you can build, step-by-step, a robust, auditable sourcing-to-settle process for your less glamorous, but nonetheless critical non-merchandise spend, save dollars that will drop 1:1 to your bottom line – and slay the three-headed beast, once and for all.

You can read part 1, part 2, and part 3 of this series here.

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