If your not-for-profit relies on securing federal funding to help further your organisation’s operations, you and your staff may have concerns about how cuts in federal funds would impact your organisation.
While your not-for-profit organisation may be looking to try to make up for any shortfall by ramping up fundraising efforts and considering other funding avenues, you also may be able to make your current funding stretch further by taking on some in-house measures, such as reviewing your supplier relationships. For example, organisations that have leveraged their supplier relationships to reduce costs or streamline processes often see costs savings of 20% or more.
As you are assessing your supplier relationships, here are some things to keep in mind:
1. See your suppliers as partners, not as vendors
When you treat your suppliers as allies that can help to support your organisation, beyond their ability to supply products and services, they may be more willing to provide advice and share ideas for how you can streamline your costs. An example would be identifying alternative, similar quality products that have a lower price point. Additionally, you should ask if there are ways that you can streamline costs for your supplier as well, such as consolidating deliveries when possible.
2. Communicate regularly with your suppliers
If you have a dedicated account representative, you should be meeting with them regularly (every 3-6 months is good, depending on the relationship) to discuss your organisation’s account and determine areas where you can maximise savings. During these meetings, you should review your current contract and ensure that current pricing structures still reflect the scope of your spend, determine if your team is adhering to ordering contract list or preferred items, and ask if there are any current rebates or incentives that can be applicable to your account. This is also an opportune time to ask your supplier if they have any new technologies or updated services that would help your organisation to streamline processes.
3. Create competitive tension
If you’ve been relying on the same supplier for many years, you likely have developed a trusted relationship with them. Sometimes, this trust can lead to price creep. This can be avoided if you create a habit of sending out RFPs to suppliers when contracts are set to expire and explain to your current supplier that you will be considering additional offers when their contract ends. This practice of creating competitive tension could make your current supplier more apt to provide competitive offers and pricing to keep your business.
By taking the time to assess your supplier relationships and determine ways to streamline associated costs, you can find viable ways to reduce operational costs and help your current funding go further in achieving your organisation’s mission. Expense Reduction Analysts can assist with this process and have optimised supplier contracts for NFPs across Australia. Get in touch with us today to learn about how we can help your not-for-profit organisation.