The Expense Category Manager Hasn’t Completed A Detailed And Thorough Vendor Analysis Of The Expense Category For Over Three Years

Because a thorough expense category analysis has many moving parts and is very detailed and time-consuming, it’s understandable that it’s not on top of most expense category managers’ “To Do” lists.

Typically, the current vendor relationship is satisfactory and everyone is comfortable with their product/service and vendor support.

Knowing that a thorough industry and vendor analysis is time-consuming and labor intensive, most expense category managers will wait until there’s a problem to implement a review.

Vendors know that they are more closely scrutinized in the beginning of their relationship with your company, so they’re on their best behavior.

Every industry has many places to hide costs, and over time, vendors will typically implement profit escalators (not usually in an area that’s closely reviewed by their customers) to enhance their margins.

If it’s been more than three years since your last thorough industry/vendor analysis in an expense category, many changes have occurred within the industry as well as with details affecting your vendor agreement.

This means you’re probably paying more than you need to and receiving lower vendor support as well as an inferior product/service.

Next week…Reason # 11