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Keeping Business Cost Under Control - Practical Corporate Cost Saving Ideas
With challenging economic times upon us, Alliance Cost Containment offers practical business cost savings ideas and techniques that every corporation or organization can take advantage of.
By: Max Friar, Alliance Cost Containment
* Corporate Purchasing Cards: Placing a corporate purchasing card in the hands of numerous employees seems like a great idea upfront. Unfortunately, this often becomes the “black hole” of business expenses. Most of the clients I’ve worked with who use these cards simply treated “American Express” or “Corporate VISA” as a line item on the income statement and rarely, if ever, allocate the associated expenses. The theory is that if bosses review and approve expense statements, the purchases won’t get out of hand. The reality is that your staff is buying a lot of items at full retail from multiple vendors in each category rather than getting volume discounts by shopping through a designated supplier in each category. Most companies wouldn’t dream of letting buyers purchase raw materials or strategic components from five or six different sources. So why is it acceptable to purchase from multiple office suppliers, MRO suppliers, travel agencies, maintenance providers, etc?. P-cards are convenient, but they shield thousands of dollars of inefficiency and wasted money. Periodic auditing of P-card related expenses is recommended as it is often illuminating...but just as often humilating and scary.
* Utilities: There are lots of ways to reduce utility bills (and enhance your corporation’
* Parcel Shipping: Overnight shipping is another area where a little discretion can save a lot of money. How often are packages sent via overnight delivery qualified to go 2nd-day delivery? Is your company using multiple overnight shipping vendors and missing out on volume discounts? Are things routinely going via overnight delivery that could go ground at a fraction of the cost? When the spend is marginal and employees are free to choose the "convenient"
* Association Discounts: Do any of your industry associations offer group purchasing discounts that your company can take advantage of? If you haven’t explored these discounts, you should. While generally not the lowest costs available, these discounts can often get you an easy 10% off retail with a few clicks of a mouse or a signature and a fax. Sometimes it's as easy as asking. Typical association-
* Travel & Entertainment:
* Supplier Consolidation:
Most of these expense areas are tied to the empowerment of staff to make purchases without central controls. While I appreciate being treated as a responsible adult as much as the next person, the evidence suggests that many companies have taken the “management”
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With over 40 offices spanning North America, Alliance Cost Containment's purchasing aggregation and vendor-management processes provide small and mid-sized business access to the kind of large corporate purchasing power they are often unable to capture on their own. ACC also facilitates detailed vendor management and reporting processes to make sure our clients capture the savings that we help generate. Established in 1992, ACC has served nearly 800 clients nationwide.