In today’s competitive business landscape, every penny counts.
As a company grows its revenue, seemingly minor expenses accumulate and take a significant toll on profitability. Are you curious whether your organization is overpaying for common expenses?
Statistics suggest that indirect expenses, (sometimes referred to as non-core expenses, or non-production procurement), comprise a substantial portion of a company’s revenue, typically ranging from 10% to 30%. These expenses might not hold high strategic relevance, but they demand considerable resources to manage effectively.
Unveil Savings Potential: 10 Expense Areas To Examine This Month
Non-core expenses refer to those crucial yet often overlooked costs from your organization’s operations. These are the expenses that, while not central to your business’s core functions, contribute significantly to your overall cost structure. Partnering with a 3rd party procurement expert provides a comprehensive approach to procurement efficiencies and cost reduction. It also offers a unique blend of strategic analysis, negotiation prowess, and process optimization. With our tailored solutions, you can save anywhere from 7% to an impressive 35% on non-core expenses, driving significant improvements in your financial performance and operational efficiency
When reducing indirect costs, here are 10 expense areas often ignored, but that ACC recommends for routine review:
- Maintenance, Repair, and Operations (MRO):Ensuring your facilities and equipment are well-maintained is essential for smooth operations. ACC evaluates MRO expenses to identify opportunities for cost reduction without compromising on quality.
- Print and Promotional:Printing and promotional materials are integral for brand consistency and customer communication. Our experts work to optimize these costs, identifying areas where savings can be achieved without compromising your brand’s integrity or print / promo quality and service.
- Facilities Maintenance: ACC’s review ensures facilities maintenance costs are aligned with industry standards and best practices.
- Mats and Uniforms:Uniforms and mats contribute to a safe and professional work environment. We analyze these expenses to find the right balance between quality and cost-effectiveness.
- Telecommunications:In the digital age, efficient communication is non-negotiable. ACC examines your telecommunications expenses to identify potential savings while ensuring seamless connectivity.
- Freight and Small Parcel:Shipping and logistics costs quickly add up. Our team delves into these expenses to find opportunities for consolidation, negotiation, and overall cost reduction.
- Waste Services:Effective waste management is not only environmentally responsible but also financially savvy. Our analysis helps your organization minimize waste-related expenses while adhering to sustainability goals.
- Lab and Medical Supplies:Laboratories and healthcare facilities require a constant supply of medical materials. ACC ensures your procurement process for medical supplies is cost-efficient and well-managed.
- CapEx Planning:Effective capital expenditure planning can make or break a company’s or higher ed institution’s financial health. Our analysis ensures you’re investing wisely in assets that align with your strategic objectives while avoiding unnecessary costs.
- Office Supplies:Often considered minor expenses, office supplies can collectively make a significant impact on your budget. Our experts identify areas for savings and ways to consolidate purchases in this category without compromising your operational needs.
Unlock the Power of Leveraged Procurement
Working with an outside resource like ACC, we go beyond traditional procurement approaches by offering a unique Procurement perspective. Our PaaS model (Procurement as a Service) provides companies and universities with access to a powerful purchasing system. Leveraging national contracts and subject matter experts to negotiate the best possible deals has never been more accessible. Your team also gains access to custom procurement services to solve your team’s specific purchasing challenges, capture value, enhance productivity & deliver meaningful impact.
However, what sets ACC apart is our commitment to flexibility and customization, ensuring the solutions offered are tailored to your specific needs, industry, and operational requirements.
When working with ACC your team benefits from:
- Cost Reduction:The most obvious advantage. Our strategies and negotiations consistently lead to substantial savings across various expense categories.
- Improved Team Efficiency:By outsourcing indirect procurement optimization to ACC, your internal teams can focus on core business activities, boosting overall efficiency and productivity.
- Quarterly Business Reporting:Transparency and accountability are integral to our approach. With regular reporting, you can track the progress of your cost reduction efforts and the impact on your organization’s finances.
- Simplified Processes:Our experts streamline your procurement processes, eliminating unnecessary complexities and red tape, leading to quicker decision-making and implementation.
- Procurement and Negotiation Expertise:Our team comprises seasoned professionals with in-depth knowledge of procurement and negotiation strategies. Their expertise ensures that you’re always in a strong position when dealing with suppliers.
- Contract Management:Managing contracts effectively is key to realizing long-term savings. ACC takes charge of contract management, ensuring that you remain compliant and poised to take advantage of future opportunities.
Your company is likely overpaying for common expenses without realizing it. Expenses allocated to indirect expenses is substantial, and failing to optimize these costs can impact your profitability. Don’t let overlooked expenses erode your bottom line – partner with ACC and unlock the true potential of cost optimization.
What is PaaS?
Procurement as a Service (PaaS) is ACC’s core service offering.
7 Ways To Lower Indirect Costs:
- Be aware of market price decreases.
- Audit: Don’t assume the contracted rate is correctly billed on your invoice.
- Establish a contract review prices to mitigate increases.
- Negotiate best pricing that is representative of the market.
- Stay in touch with your vendor (consistently)
- Understand your agreements: your contracts hold the ins and outs of your indirect purchasing
- Do not accept a price increase unless it is legitimate!