6 Budgeting Tips for 2017

The start of a new financial year provides the opportunity to review budgets and implement cost reduction measures. But do you have a strategy to reduce and control office supplies expenditure?

With 30 years in the office supplies industry, I’ve put together my fair share of budgets. We can help you to control your spend and manage the conflicting demands of budget cuts - starting with a robust budget plan.

Here are my tips for a more effective budgeting process.

1. Plan ahead

Starting early will pay dividends, giving you time to define and prioritise critical targets, and align your strategy with long-term business goals.

If you have poor visibility of expenditure or usage now is the time to commission an extensive audit, giving you hard facts with which to plan
It will assess your category requirements and incumbent supplier(s), analysing your past 12-month spend
A robust audit will highlight if you are being charged at the agreed contract rates, the percentage of core vs non-core spend, and if there are better alternative products available

An invaluable exercise for budget planning!

2. Ask questions

There are many software tools now which make budgeting quicker and simpler. In addition, discussion sites such as Twitter and Quora enable decision makers to interact with peers and gain valuable insight on which systems may be best for your business. Although each industry is different, the conversational nature of these sites, along with networking events, make them ideal methods for gaining ‘seen it, done it’ advice and practical information.

3. Test the market

The office services market moves quickly with price changes, new products and innovation commonplace. To keep updated and ensure effective purchasing many businesses routinely perform benchmarking – it really does pay to test the market even when you are satisfied. This should be built into your plans as part of a continuous improvement strategy; an investment that will provide detailed insight and improve profitability.

4. Control purchasing

If your budget has reduced but your service requirements haven’t, it’s time to cut costs. It is critical to control all office supplies purchasing, especially for businesses with multi-site locations and order points. Ensure a strict purchasing process is in place, and that staff understand the importance of sticking to it. It's useful to highlight the effect buying off-core has on the company’s bottom line, and how this impacts employees in the long-run.

5. Make budgeting useful

Predicting expenditure to the penny for the year ahead is not objective. Rather, ensure the budgeting process gives your team meaningful direction at the right level of detail. This will help to ensure proactive management - and avoid driving everyone crazy!

6. Review, review, review

Once the budgeting process is over, don’t forget to review, review, review. Regularly ask your team and supplier(s) these questions:

How are we doing compared to the budget? If the spend is different than expected, why did this happen?
What must we do now to have a better result next month? How can we stay within budget and ensure sustainable value?
What processes can we implement or develop to ensure long-term success?

At Red Herring we help businesses to spend smarter and manage suppliers effectively. So if your office supplies and services expenditure has increased, or you can’t remember the last time a supplier offered product alternatives, talk to us. We can save you time and improve your bottom line.

Sources:
https://www.allbusiness.com/8-budgeting-tips-for-your-business-14902065-1.html
https://www.allocadia.com/cmo/better-budgeting-tips-for-2017
http://www.investopedia.com/articles/pf/08/small-business-budget.asp

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