Why to do Spend Analysis?
Following are the few main reasons for doing spend analysis for our business:
- To prepare more detailed and accurate financial and annual reports for our company
- To find opportunities to cut costs across all sped category
- To create budget and forecast for as procurement
- To spot fraudulent or unacceptable maverick spending
- To identify supply risk, make risk management plan and implement
How to do spend analysis – a 6 steps procedure
- Identify and Set your goals – What you want to achieve, obviously one from above list or anything extra
- Find the source of spend data – company’s ERP, procurement tools, invoicing software or spread sheets!
- Gather data in one place and clean and compile
- Categories and group the spending
- Analyse the data, top items, top suppliers etc.
- Implement changes & Report back – Implement the changes those you can. Prepare a clear, concise, and actionable report and share with your team leaders and senior management.
A YouTube video that describes Spend Analysis – Introduction – Procurement training – Purchasing skills
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