Every company has to deal with expenses. A CFO try to keep the expenses as low as possible for better results. One way to save money on the expenses is by outsourcing the indirect procurement. In this blog we’ll explain the benefits of outsourcing.
Outsourcing the indirect procurement
Outsourcing indirect procurement can help a company save time and money by allowing them to focus on their core competencies and activities. Indirect procurement refers to the purchasing of goods and services that are not directly related to a company’s production process, such as office supplies, cleaning services, and marketing materials. By outsourcing this function to a specialized procurement company, a company can take advantage of the procurement company’s expertise, buying power, and network of suppliers to get better prices and terms on the goods and services they need. This can help the company save money on their indirect procurement expenses, which can be a significant cost for many businesses. Additionally, outsourcing indirect procurement can free up time and resources for the company, allowing them to focus on their core activities and potentially increasing their efficiency and productivity.
The different stages of outsourcing
The terms “source to pay” and “procure to pay” refer to different stages of the procurement process. Source to pay, also known as procure to pay or end-to-end procurement, refers to the entire process of purchasing goods or services, from identifying the need for a product or service, to evaluating and selecting suppliers, to negotiating prices and contracts, to paying for the goods or services. Procure to pay, on the other hand, specifically refers to the final stage of the procurement process, which includes the payment for goods or services that have been purchased.
Outsourcing the invoice management
When a company doesn’t like to outsource parts of procurement process, it stil can save a lot of time and money. This is possible by outsourcing the invoice management especially for the indirect procurement with their so-called on-time suppliers which are very time consuming.