Sustainable expense management programs should be managed to align outcomes with company objectives. Doing so amplifies their impact, strengthens stakeholder and supplier relationships, and provides real savings that can be reinvested as necessary.
In this 5-part special series, Art of Procurement Host Philip Ideson will take you through the keys to running a successful expense management program, pitfalls to look out for, and tactics to cover incumbent supplier management, strategic sourcing, and demand and category management.
In part 2, we describe the four most common mistakes companies make when starting an expense management program – and how to avoid them:
- Setting unrealistic cost savings targets.
- Determining arbitrary savings targets at the category level rather than taking into account market conditions
- Sending a letter to all savings with a demand for a certain percentage reduction or cash rebate.
- Taking actions that do not have alignment and buy-in from key stakeholders.
- Losing sight of your medium to long term goals.
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Links & Resources
If you are considering starting (or revamping) an expense management program of your own, you’ll want to check out our free resources: The Ultimate Guide To Expense Management: Achieving Cost Savings That Stick and 24 Expense Reduction Tactics that Generate Cash for Your Business.