Simple Procurement Hacks to realize Savings

To elaborate further on previous article,  “Price focused Sourcing is bad for Business”, I have created a list of procurement hacks for realizing savings. saving-clipart-yTkeraBAc

1) Audit invoices and purchase orders to identify unapproved vendor charges, price discrepancies, and unapproved purchases.

2) Audit vendor database to ensure accurate data, remove duplicate information and ensure vendor has proper approval.

3) Share sales demand and budget data with procurement team.

4) Share inventory data with suppliers and have them do the same.

5) Develop a quality plan.

6) Focus on total cost instead of price.

7) Build strong supplier relationships by working with vendors to improve quality, delivery and logistics; and encourage the use on long-term contracts with quality stipulations and year by year locked in prices.

Are your procurement expenses deteriorating your bottom line? Could your sourcing process use a re-design? Contact me now http://bit.ly/2prHowW

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E.O.W (End of the Week) Notable Tip: Quality Improvements

Happy Friday! I hope you had a fabulous week!

Today, I was thinking about quality. As you have learned, Quality is what the customer says it is, not what you think it is. When does quality begin and how do you ensure your efforts bear fruit in a quality improvement engagement?

“Quality begins with education as it enhances your ability to see the big picture and supports deeper understanding of the activities that must take place in order for any quality improvement engagement to be successful.”

 

I hope you enjoyed this short tip and as always, “Success is continuous Improvement.”

 

Top 10 Business Tax Shelters You Should Know

As we all know, two things are certain in life, death and taxes. I personally enjoy doing my taxes but like everyone else I don’t enjoy paying them. In business, it is critical that you know all the deductions that are available to you when it comes to keeping your bottom line healthy and your tax payment as low as possible. See below for the top 10 business tax shelters you should know:

  • Real Estate
  • Pension Plans
  • 401K/Roth
  • Municipal Bonds
  • Health Insurance
  • Life Insurance
  • Tuition Assistance/Reimbursement
  • Charity
  • Leasing Vehicles (offers larger deductions than owning one)
  • Assets bought on credit (e.g.; computers, equipment, inventory, office furnishings, et cetera)

It is important that businesses keep a separate high yield savings account designated for taxes and automate quarterly deposits.

Notable Bookkeeping knows taxes. Let us help you with your tax planning and research needs. Contact us today

Lean Wednesday Tip: Issuing Section 1244 Stock

“Small C Corporations benefit from issuing Section 1244 Stock as it offers shareholders better tax treatment if they lose money on the disposition of their C corporation stock. It is best to create a written corporate resolution that specifically states that the shares are Section 1244 stock. Also, make sure to authorize more shares than you’ll sell.”

E.O.W (End of Week) Notable Tip: Key Performance Factors for effective Supplier Selection

Happy Friday! Hope you all had an amazing week!

Today, I want to discuss the 12 most important factors you should consider when choosing a supplier. These are important because they ensure supplier selection success and help you realize quality opportunities. Without further ado, please read below for the top 12 factors to consider when choosing a supplier, and as always, remember, “Success is continuous improvement.”

  • Type of product (new tech vs mature product)
  • Quality
  • Quality Assurance (certifications, audit processes)
  • Flexibility
  • Reliability
  • Location
  • Price
  • Delivery Capability
  • Lead times
  • Financial stability
  • Length of time in business
  • Relationship strength
  • *Of course, you can always add to the list based on your business requirements*

Lean Wednesday Tip: Client Relations

“Never let a client treat your employees badly and if such incident does occur fire the client immediately. It is of most importance that the clients you work with have cultures that naturally sync with yours. A sale is never worth the mistreatment of your employees.”

IT Asset Management Checklist

It is important that you are periodically auditing and logging critical IT assets for the purpose of minimizing security, conduct and financial risks. Below I have noted the most important assets that should be properly logged and have auditable documentation.

IT ASSET MANAGEMENT CHECKLIST:

  1. Hardware and Software
    • computer user, UPC, location, model number, et cetera
  2. Network and communications infrastructure, servers and apps
  3. Alarm systems
  4. Telephone circuits
  5. Vendors and Service Providers
  6. Licenses
  7. Purchase and disposal info
  8. Computer and Laptop software upgrades
  9. List of all apps in laptops or computers for each employee including authorization and security information.
  10. Cloud Data backup hardware (e.g.; external USB drive)

By using this checklist the next time you conduct an IT Asset audit you’ll be able to identify vulnerabilities and exploits that were not previously known to you. For example, let’s say your policy states that there should be 10 laptops kept in the supply room at all times but when you conduct an audit you find only 8 and employees have been careless with the laptop request form. The laptops also have not been entered into the tracking system making matters worse as now you have to dig through invoices to identify the two missing laptop model numbers and SKUs.

An IT Asset Policy is not effective if it is not enforced regularly. Employees must be reminded of them everyday and trained periodically.

 

E.O.W (End of the Week) Notable Tip: Decision Making

Happy Friday! I hope you are all doing well.

I’ve been currently reading, “Business Adventures” by John Brooks and am fascinated by Xerox’s culture during the late 1940s. I learned that employees put up their mortgages to ensure the success of the company. Will your employees be willing to do that for your company?!

Nevertheless, today’s E.O.W Notable Tip is about how to make quicker informed strategic decisions. Like always, remember, “Success is continuous improvement!”

 

“To reduce the decision making cycle time opt for collaborative discussions and brainstorm sessions, create a small team of key people from each department ( 4-5 max) and ask them to create industry and customer value maps with a competitive analysis comparison with recommendations per insights gathered, visually display these maps to the whole team and have them vote for the best profitable strategy that suits your company’s current capabilities.”

Lean Wednesday Tip: Accounts Payable Performance

 

“By encouraging your A/P team to report and make critical department KPI metrics visual, such as, process cycle time, activity lead times, and cost per invoice with industry and competitor comparisons you realize the opportunity to reduce costs, increase productivity and streamline processes.”

How to stop Freight Charges from eating away at profits

The shipping and delivery cycle time race amongst valuable brands like Amazon and Walmart is a fierce one. Many parcel companies like UPS and FedEx may offer discounted rates for delivering on time but the real question is, “Are they actually delivering on time?”

By implementing effective visual internal controls, your company’s accounts payable team may be able to identify delivery discrepancies per regular parcel audits and if they are found you are not required to pay them.

Other things to look for while auditing would be:

  • Duplicate Invoices: Parcel vendor may generate duplicate invoices with different purchase order numbers, tracking numbers, invoice numbers, et cetera.
  • Discount Rate Verification: Thorough analysis of the invoice is critical for the purpose of ensuring that the proper discount rate was included.
  • Improper Billings: Sometimes there are multiple parties involved and you could be billed for the shipment when your contract specifically stated that “Vendor XX” was responsible for payment. You should integrate freight audit software into your accounts payable process to mitigate this risk.
  • Rate Verification: Essentially, your accounts payable team should be ensuring that the rate base, math, mileage, product classification and weight all match your purchase order and contract agreement, otherwise you are overpaying.
  • Fuel surcharges: It is important that this charge matches what is in your contract and not the current market rate.

Auditing offers the opportunity to gather critical data, such as, shipping spend by origin, destinations, general ledger codes, customers, fuel charges, vendors and carriers. This data can be used to improve your financial planning and analysis, and offer opportunities to streamline processes and realize cost innovations.

Notable Friday Chat: Fraud Risk Management

Happy Friday! I hope you’ve had a great week. With that said, I want to leave you with a short message about Fraud Risk Management. Until next week, have a wonderful weekend and remember, “Success is continuous improvement”!

 

“To minimize fraud risk, top management must be committed to a Fraud Risk Management program, implement visual controls and employee guides, have clear reporting procedures and whistle-blower protection, have an efficient investigation process, and most importantly, translate policy into daily activities.”