Today many businesses are looking
to cut costs by reducing staffing and lowering the quality or quantity of
products sold. The studies have found that those methods are not a long term
solution nor do they lead to growth. Instead, companies those are most
successful look for ways to lower costs by finding and cutting unneeded or
excess spending and to reducing costs of materials through volume discounts and
automation of supply chains.
The first step in spend
management is generating spending and outgo reports for all departments. This
allows money to be tracked and ensures that vendors are charging appropriate
amounts. If they are not, with spending reports, this can be rectified.
Further, this information, when paired with supply chain data, can show which
vendors are providing the best prices. Studies have shown that businesses can
save up to 12 percent on the cost of supplies by engaging in cost management.