Cost

Reduction Services

Where to Locate Maximum Business Savings
How do we reduce costs more and increase vendor accountability at the same time?

Cost Reduction Benefits and Advantages in Business

Expense reduction should NEVER be accomplished by lowering the expectation of quality for products or services rendered. Instead, cost reduction must aim at the elimination of wasteful elements in in normal business operations. It is a continuous process of critically examining various elements of costs and each aspect of the business (i.e. procedures, methods, products, vendor and supplier management including financial planning, analytics, and ongoing monitoring of agreements and contracts.)

Some businesses are concerned that conducting a business cost reduction analysis might damage their relationships with existing suppliers. The better you understand the marketplace, bench-marked deliverable’s, and vendor standards (pricing-terms-conditions-clauses), the closer you can manage the expectation of those deliverable’s raising the vendors quality and accountability. It is indeed possible to cut costs and improve delivery, while strengthening relationships with trusted suppliers.

To seek rate reductions from current providers, you must do so in a positive manner.

Cost Reduction

Cost reduction analysis and your relationship with your Vendors

The reduction should not be at the cost of reducing quality of products or services rendered.  Thus, cost reduction must aim at the elimination of wasteful elements in methods of doing things. It should not be at the cost of quality. Cost reduction is a continuous process of critically examining various elements of costs and each aspect of the business (i.e. procedures, methods, products, vendor and supplier management including financial planning, analytics, and ongoing monitoring of agreements and contracts.)

Some businesses are concerned that conducting a business cost reduction analysis might damage their relationships with existing suppliers. The better you understand the: marketplace, bench-marked deliverable’s, vendor standards – (pricing-terms-conditions-clauses) the closer you can manage the expectation of those deliverable’s raising the vendors quality and accountability. It is indeed possible to cut costs and improve delivery while, strengthening relationships with trusted suppliers.

To seek rate reductions from current providers, you must do so in a positive manner.

Here are three cost cutting tips that can strengthen your supplier relationships:

If you pay supplier invoices with a business credit card, offer to pay with cash or check in exchange for a % discount on each invoice. This benefits you by immediately lowering your costs, removing potential late fees and benefits the supplier by eliminating the credit card processing fees that the supplier would have paid otherwise. Note — to be win-win, the % discount must be less than the supplier’s credit card processing fee expense. That way the supplier experiences cost savings as well.

If you purchase a consistent amount of products or services from a supplier, consider establishing a minimum purchase commitment with the supplier in exchange for a discount on any purchases made above the minimum purchase commitment. This benefits you by reducing your marginal costs for purchases above the minimum and benefits the supplier by guaranteeing a certain amount of revenue. The supplier also benefits by earning incremental revenue on any purchases you make above the minimum.

If you have significant confidence in your relationship with a supplier, consider negotiating a discount in exchange for signing a longer than normal contract (e.g., 4-year versus 3-year), or by extending the term of a current contract beyond its current expiration date.

Cost reduction analysis doesn’t need to be an adversarial process. Instead, it can be used as an opportunity to think creatively and collaborate with your trusted suppliers to everyone’s benefit.

Cost Reduction

Our Cost Reduction Solution Specialists will Identify Opportunities to Reduce Cost, Improve Efficiency and Reduce Risk.

There are many advantages of cost reduction. Cost reduction causes a definite increase in margins. The savings may also be passed to consumers in the form of lower prices or more quantity in the same price. This will create more demand for the products, economies of large scale production, more employment through industrialization and all-round improvement in the standard of living.

Increased competitive strength to the industry stimulates more exports. Thus, profit is increased by reducing the costs, it can be utilized for expansion of the organization which will create more employment and overall industrial prosperity.

Increase in profits also provides a basis for more dividends to the shareholders, and with investors spend management is a high expectation .

Critical Expenses
 Telecommunications, Utility and Energy, & Consumption Waste Management
Office Administration
 Office Supplies, Printing Expenses, & Shipping/Postage
Facility Expenses
 Rent, Cleaning Services, Pest Control, Equipment Rental, Janitorial Services, Maintenance Services, & Repair Services
Professional Services
 Travel, Records Management, Advertising and Marketing, Merchant Services, & Online and Software Licensing Services

Interested in Cost Reduction Strategies?

Use this contact form to reach us. One our our reps will be in touch. Once we know more about your needs, we will be able to provide a solution to your business.

  • Spend Analytics

    Provides identification of profitability trends and compares/contrasts changes over time.

  • Benchmarking (Rates-Terms):

    Gain a competitive advantage with national insight on spend categories and vendors.

  • Vendor Risk Management:

    Track historical vendor data. Avoid duplication of selection errors.

  • Document Management System

    Increases search efficiency with detailed centralized repository.

  • Vendor Contract and Agreement Inventory

    Stops the misplacement of potentially cost affecting agreements and loss of assets.

  • Spend Visibility

    Identifies savings opportunities, better enforce and facilitate contract compliance.

Cost Reduction Services Inquiry