November PM cover story author Michael Bevis, chief procurement officer, Naperville, Illinois, writes in “Harnessing the Power of Money” that local governments are managing the power of their spending, directing it in purposeful ways, and making it more visible and accessible to the public through the use of spend analysis.
Details on spend analysis are included in the article and here is a step-by-step summary along with action steps that are described in the copy:
- Identify how money is spent: payables, purchase cards, check requests, petty cash, and contracts.
- Collect the data: payables, purchase card, purchase order, and so forth.
- Cleanse the data: standardize the information, eliminate duplicates, and fix errors.
- Redact: remove payments to individuals and where security issues may be involved.
- Classify: align vendors and payments to the proper commodities.
- Collate: aggregate the spend and related data into one database.
- Take Action: identify opportunities to create value for your entity.
Spend Analysis Action Steps:
- Consolidate invoices.
- Identify duplicate payments.
- Ensure existing contracts are being used.
- Verify correct prices are being charged.
- Insure the optimum number of vendors for each commodity.
- Negotiate best terms.
- Coordinate and cooperate with neighboring jurisdictions.
For more information on spend analysis, read the November PM.
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