PROACTIS Blog

Tail Spend: What is the Real Cost & What are the Potential Savings?

Charlotte Sutton
Charlotte Sutton,
PROACTIS
Allowing your organisation to spend the ‘tail-end’ of addressable spend with little or no sourcing support, and with little focus on the large number of invoices involved, clearly results in paying higher prices.
 
Allowing your organisation to spend the ‘tail-end’ of addressable spend with little or no sourcing support, and with little focus on the large number of invoices involved, clearly results in paying higher prices.
 
It also means incurring higher risk and burdening Accounts Payable and other areas with a large invoice-handling workload.
 
But by addressing the tail-end of spend together, Procurement and Finance can deliver significant savings in terms of both reduced unit prices and process improvements – both of which free up money and valuable resources.
 
“For a typical organisation 5% savings on tail-spend can be equivalent of a 10% increase in net profit.”
 
A greater focus on tail-spend is required by applying a professional, methodical approach, and by using the right combination of eProcurement technology combined with appropriate outsourced and/or managed services.
 
 
 
 
 
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