Wednesday, December 18, 2013

End of the Year Budgets

The year is quickly speeding to a close.  Many buyers have budget they want to use up before the year end. Here are some tips to maximize your remaining budget before the new year ball drops!

Most Purchased Items
Take inventory of items purchased the most frequently. Can you stock up and obtain a bigger volume discount? Keep in mind the needed product storage or your distribution center warehouse space.  Review with your teams anticipated usage that might impact the need for higher or lower quantities.  If you can afford to hold the inventory, it might be worth the savings for a bulk price and freight to buy now.

Highest Spend Products
Are there products that are a big hit to your budget? If it is something you purchase every year, evaluate if your current excess budget might cover it now.  This will keep the expense off the books next year and allow funds to be used for other items.

Vendor Closeout Savings
Keep your eye out for vendor promotions or special offers.  Many suppliers want to get products off their books and are slashing prices.  Keys to success are to evaluate if you need the products and if the savings is truly a value. Evaluate price per unit, carrying costs, install expenses and all the incidentals. Once you crunch the numbers you might score some great deals.

Negotiate Terms
Many suppliers are willing to negotiate for bigger ticket purchases. Discuss more favorable terms or spreading out payments. This can help with cash flow is tight. Vendors are happy to record the sale before the close the year and typically are willing to work with you.  Another option is to work closely with your Controller. Many companies want to part with cash before year end for tax purposes.  Ask your vendors for pre-payment discountsby pre-paying up front. You shave off some cost and enjoy the tax break.

The New Year will be here before you know it. Don't delay. Now is the time to use those budget wisely!

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