PROACTIS Blog

What is your Strategy to Improve Profitability?

Charlotte Sutton
Charlotte Sutton,
PROACTIS
In today’s business climate, aggressively growing the top line is tough. However, opportunities exist to improve the bottom line without risking/ destabilising the core business operation, mass redundancy programs, or taking calculated risks by increasing end-user prices etc.
Spend Control and eProcurement is proven to be one of the easiest and fastest ways to reduce excess costs. It provides more control and accountability over operating profitability by increasing the efficiency gained from each pound/dollar etc. of revenue and controlling each pound/dollar etc. of spending.

Spend Control initiatives deliver three types of cashable savings:
  1. Secured savings – where favourable terms of purchase are acquired through changes in pricing, mix, demand or quality and increased contract compliance.
  2. Mitigated savings – delivered by an ongoing program of cost and risk avoidance
  3. Cash-releasing efficiencies – direct financial savings where money is chosen to be released from efficiency gains.
Spend Control and eProcurement also generates non-cash releasing efficiency gains by improving the performance of available resources – adopting best practice, improving business processes etc.

In the next few blog posts we will list some of the opportunities for P&L cost savings in four key areas of Spend Control.

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