Knowing that you’re paying the contracted price for indirect purchases negates the need to ‘over-touch’ invoices.
When making capital purchases, chances are that there are significant controls in place, regardless of the location where that purchase is made. However, when it comes to indirect spend, that may not always be the case, especially when you have employees at multiple locations making their purchases at different retailers. As an example, how do you validate that the price you paid for items purchased at a Staples store in the Midwest not only matches the contracted price, but that the price will be the same when someone else in your company’s Southeast office makes the same purchase at another Staples store? Furthermore, how would you determine if the volume discounts are applied to the combined purchases from multiple locations? Working with an indirect spend solution provider can give you, not only confidence, but full visibility into your transaction as well.
You should look for a solution that digitizes all transaction activity, removing paper and manual intervention from the process, and automatically populating the documents with the correct pricing. And that mitigates the chance for someone to key in a wrong price or terms. Obviously, no one wants to overpay for anything, but there are additional benefits to validating pricing consistency across the enterprise.
- Avoid extra administrative work – It takes a long time to manually go through what could be hundreds if not thousands of invoices to ascertain whether the right price has been charged. If someone doesn’t catch it in procurement and approves the invoice, the likelihood is that the wrong price will be paid.
- Reinforce trust – The buyer/seller relationship should be one based on trust. And knowing that the price is accurate will lead to a significant reduction in disputes; disputes which can take up substantial administrative hours and interfere with the buyer/seller relationship.
- Maximize cash flow – Managing cash flow has become one of the most important tasks in finance. When prices are consistent throughout the enterprise, the company knows with accuracy what dollars are flowing in and out and on what date. That empowers senior management to plan from a much more strategic position.
- Ensure budget accuracy – Inconsistent pricing can negatively affect a company’s budget. Further, when you’re talking about national accounts with multiple locations, even a small discrepancy can lead to big headaches down the road.
- Eliminate unintentional errors – Whether it’s on the supplier or buyer side, there’s always the possibility of someone not being as careful as necessary when it comes to charging or paying prices. With prices automatically populated into the invoice, that concern goes away.
Price validation is only one aspect of the indirect procurement process. Learn more about how AmeriQuest’s Indirect Spend program can give you the control you need to help your business grow.