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Managing Tail Spend

procurement management

Every day, our team at Bell PM process purchase orders (PO) as part of our Tail Spend Management Service. Our customers understand that there are many operational costs generated in creating, approving, placing, and paying a PO and they have chosen Bell PM to help them simplify their processes and save.

The Centre for Advanced Procurement Strategy (CAPS) found that the average cost per PO is somewhere between $50 and $1,000, based on industry and vertical.  Let’s assume that a telecommunications company processes 20,000 POs in their Tail each year. Reducing the cost by 20% can quickly add up to significant savings when multiplied by 20,000!

Reduce costs

Do you know the true cost of a PO in your organisation and how you can reduce it?

  • Have you calculated how many POs you are processing, and how long it takes to travel through all the stages of your procure to pay (P2P) process? (eg: source, negotiate, onboard, order, receipt, invoice, pay)
  • Do you know how much you are paying, and to whom, each hour for the tasks in each step?
  • Do you know how much your operational costs are? For example, fixed costs such as rent, insurance, equipment and car lease payments, utilities, licences etc. and variable costs which could include telephone, advertising, bonuses and/or commissions, office supplies, and fees.
  • Do you know how many suppliers you manage and how many exceptions you are dealing with, on average, and how long it takes to resolve them?
  • Do you know how much of your invoicing process includes issuing, sending, receiving, and processing of invoice data by electronic means? Do you know how many invoice errors you manage and how many duplicate payments you make?

Research from CAPS has shown that effective tail management leads to 60% fewer transactions, 40% lower transaction costs and 8% direct cost savings.

Our customers are convinced we add value and the diverse suppliers we engage say that our relationship with them has been ‘instrumental in keeping them moving forward’.

Engaging Bell PM to augment your Procurement Team can instantly reduce costs by consolidating your suppliers for singular, or entire parts of your business, down to one strategic supplier: Bell PM. 

One process, one contract, one relationship, and a single business platform. One touch processing.

Is it time for your organisation to take the next step?

Find out more here