Goods Spend Analysis Report

Goods Spend Analysis Report

INTRODUCTION

Spent analysis is the examination of how money is spent. It consists of direct (goods and services that go into final products) and indirect spent (goods and services that do not go into final products). The analysis occurs in three dimensions: contractors or suppliers, customers, and commodities or services.

Spend analysis provides metrics to monitor organizational spending and is a first step in transitioning from a tactical to a strategic procurement perspective.

- What did the company spend its money on?

- What suppliers received the majority of the business? Did they charge an accurate price in the purchase?

- Which department spent their money that was correctly budgeted for?

- Are there opportunities to combine volumes of, and standardize product and service requirements, reduce the number of suppliers, or exploit market conditions to receive better pricing?

Companies perform spend analysis for several reasons. The core business driver for most organizations is profitability. In addition to improving compliance and reducing cycle times, performing detailed spend analysis helps companies find new areas of savings that previously went untapped, and hold onto past areas of savings that they have already negotiated.

The following steps must be taken n order to conduct goods spend analysis for my organization:

Step 1: Obtain Management Approval

The very first step is to obtain management’s approval on doing the spend analysis by developing briefings to educate them, informing the senior manages about what spend analysis is, how It can benefit the company, and how they can contribute to success. If the boss wants spend analysis, it is easier to convince others.

Step 2: Staffing

Spend analysis cannot be performed well without adequate staffing. A designated team should be formed and responsibilities should be assigned. Team members must give this project a serious consideration and should be...