5 reasons why using an expert to manage your indirect spend will pay for itself

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Are indirect expenses directly costing you cash flow you don’t need to spend? While you may have a difficult time defining your indirect spend, these expenses seem to have no such problem adding up.  Expenses such as marketing, office equipment, maintenance or industrial supplies are just a few typical indirect expenses.  Organizations rarely have the right resources available to manage these costs, but that does not mean they can’t effectively manage the expenses.

Here are 5 reasons why companies should look to experts to help them manage indirect costs:

1. Ability to tap into expert knowledge

No matter what business you are in, everyone has a core business they perform and unless you specialize in indirect cost management, your organization is likely to be leaving money on the table. Most organizations do not have the expertise in house to match those skillsets on the other side of the table when it comes to buying indirect goods and services.  This is why using experts makes sense.  We all use experts throughout our lives.  Would anyone really consider doing their own dentistry? How about legal advice, tax advice or just car maintenance? We all use experts in our life to get the best value and provide a level of protection.  Indirect spending is no different.

2. Lack of internal resources

Everyone is faced with doing more with less. Procurement is no different.  This is why every procurement department is focused on their core suppliers that keep the daily operations functioning at a high level.  But who is actively managing non-core suppliers? In most organizations, no one!  Indirect providers know this and use this to their advantage. This is exactly why companies are paying too much and not getting the highest value for their money.

3. Turn-key solutions

Just like you would never expect your doctor to ask you to run a blood test, experts do not ask you to handle the research, analysis and communications needed to provide a solution.  Sure some interaction is needed to gather and understand the issues, but the actual work is performed by industry experts that are very experienced and trained to provide cost effective solutions ready to implement into your organization.

4. Increasing cash flow

Indirect spend can range between 20-50% of all expenses.   Finding a way reduce indirect spend therefore has a very positive effect on increasing the bottom line.  Many indirect cost reduction projects find ways to reduce costs by double digits.  What impact would reducing your spend by double digits mean to your organization?

5. No risk

Still not sure if using an expert is right for you?  Try one for free.  The right experts will provide a no cost assessment up front to determine if the fit is right.  No investment is required.  The expert will identify the opportunities and provide a roadmap on how to achieve the results.  Compensation is paid out of from the savings achieved.

Every organization has indirect expenses. The question is how effective can you manage those expenses. Effectively managing those costs can make a huge difference in your cash flow.  Using the right team to help you manage these costs can pay for itself in a very short amount of time. If your goal is to reduce indirect spend in your organization but lack the proper resources, contact me for a no cost assessment and I can put you in touch with our team of industry experts.

Question: What is your experience in managing these indirect costs? Please share your experiences with me.


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