For these reasons you should reduce your suppliers

Reduce suppliers? That can bring many benefits. It often happens that organizations have a large and extensive supplier base. Having many different suppliers takes time and money. Naturally, each supplier has a separate invoice, each with their own payment term and contact person. If a company has hundreds of suppliers, it means that there are also 100 payment terms and so on. Therefore, reducing the supplier base can bring many benefits.

Save costs

Internal costs can be saved when you reduce the supplier base, the costs can be reduced by up to 21%. This lowers the TCO (total costs of ownership) of your company. The TCO is the total cost of purchasing and owning a product or service over its entire life cycle. Here you should especially think of the costs that go beyond the purchase price of a product, such as maintenance, acquisition and costs that are spent on courses or training, for example. It concerns the costs of the entire process and invoice management is therefore also much more efficient.

Limit your contacts to one point of contact

If the supplier base is reduced from dozens of suppliers to one supplier, this naturally saves a lot of contact moments. Instead of dozens of contact moments, there is suddenly only one contact moment. This of course saves a lot of time, time that you can spend on processes that are less high on the agenda and often not timed.

What does this mean for my business?

In the first instance, reducing the supplier base means that a large group of suppliers is replaced by one large supplier. That means: one point of contact and one payment term for the suppliers. This relieves various departments such as the financial department, the warehouse and the goods receipt department. If invoice management is also digitized and automated, it will also be a lot more efficient. In this way you have already saved a lot of time and money within the organization. There are of course many more ways to save time and money, such as indirect procurement. This refers to all goods that support the core activities of your organization.