The Key to Managing Supplier Relationships to Cut Waste and Boost Your Bookkeeping Strategy
Supply chain management is a huge way of saving money for your business. What you might not realize, is that improving your supplier relationships, inventory management systems, and inventory management techniques can seriously reduce your budget waste.
As a business owner, there are a few simple steps you can take to implement solid SRM strategies and practice good inventory management.
Selecting a Supplier for Outstanding Bookkeeping
So, you’ve successfully established your company/brand, hired and managed multiple employees, and started making sales. Great job!
Unfortunately, these aren’t the only aspects of running a business that’s profitable. A business that wishes to grow continuously and save money in the long-run will invest in reliable and trustworthy business partners. This includes the specific supply chain vendors it chooses to work with.
Find Someone Consistent
Any business that involves selling a product in nature requires a consistent supply of materials and supplies; the more sales you make, the more you need to manage inventory.
With that said, it’s important to build a reliable relationship with whoever is involved in your supply chain. A rapport that is communicative from both parties will have a higher chance of turning into long-term relationships that can ultimately save your business a lot of money.
Do Your Research
As your business continues to grow, you can assume that the number of supplies and materials needed to operate will continue to grow as well.
This is the case for any business that sells a product or service. In order for a business to be profitable, they need to find every opportunity to reduce the costs involved with the procurement phase.
When it comes to the procurement phase, it can take time and energy to find the right supplying partners. So what do you do? R
You won’t be able to know which supplier to do business with if you don’t know the nature of your own business first!
Do not just take the first option available or a contractor/firm just because it’s popular or “name brand”.
Know the Distance
When it comes down to choosing business partners, one of the most common criteria is distance.
Your business’ supply partners should be as localized as possible. A greater distance between your business and your suppliers most likely results in higher costs.
Simply put, this happens because a bigger distance means more miles your inventory will need travel in order to reach you.
Managing your supply chain strategies and ensuring you have strategic suppliers is key.
Keep an open line of communication with your suppliers and vendors. Informing your partners about the nature of your business can help build mutual trust and loyalty.
Ultimately, this makes your vendors feel involved in your business and can reassure them that they are a driving force of revenue for any business of scale.
Great! Now that you’ve successfully chosen the partner(s) to do business with, it is definitely worth your time to invest in a management system.
Once you get more and more comfortable with a variety of business partners and suppliers, it can become difficult to keep track of which suppliers are right for each job at various times.
Use arrow cloud bookkeeping to more effectively communicate inventory, expenses, and budgets with your suppliers. Having a well-organized budget helps you better relay financial information to your suppliers!
The Budget Benefits of SRM
When your business decides to implement a supplier management program, it has the potential to reap some cost benefits.
Many other benefits unrelated to costs also arise. These can help your business grow rapidly to new heights.
Get Rid of Price Volatility
One of the many benefits that can decrease the overall costs for your business when using SRM Programs is mitigating the volatility of prices.
How many times have you gone to the store to replenish a product only to find that the market has increased the price by a whole dollar?
Now you need to spend valuable time debating whether or not to just pay the extra dollar or spend more time and energy to find another grocery store with more cost-efficient options.
Like yourself, your business will go through some of the same issues if a solid SRM program is not implemented. It can be frustrating dealing with the fluctuation of market prices, regardless of what type of product your business is selling.
A successful SRM program can help put in motion a long, ongoing relationship. In turn, these result in more fixed prices for materials and supplies that will make replenishment much cheaper.
Another benefit of having a great SRM Program in place is that healthy relationships can make solving any type of supply chain problem much more efficient, saving both time and money.
For example, a supplier for a retailer who is openly vocal about a specific delay in one of their shipments to the partnering businesses’ management can make operations much simpler.
Management can make scheduling changes such as giving employees the day off or shortening their shifts. Making these changes reduces both employee costs and labor expenses.
Having a good relationship with your supply chain partners can affect a business in ways that many fail to realize. It is much more than simply delivering supplies.
For a business that desires to grow and benefit from economies of scale, establishing and maintaining these relationships cuts down the company costs.
Manage your supply chain today with communication, relationship building, and financial organization. Gain a competitive advantage against your competition with a cloud bookkeeping service!