A seamless logistics process can help companies improve productivity and reduce their supply chain costs significantly, but many organizations are held back by their vendor contracts. It’s an area in which today’s leaders are now taking a proactive stance, and within this latest post we’ll take a look at why your organization must audit your vendor contracts to achieve optimal logistics performance.
Identifying Volume Order Opportunities
One of the key benefits of the auditing process is that it empowers organizations with the ability to identify volume order opportunities. By auditing their vendor contracts, they can determine how often they order from specific companies and how large a volume of business they conduct with companies over a set period of time. They can then pinpoint their order demands over a long period and complete bulk ordering to minimize expenditure.
Consolidating the Payment Process
When auditing their vendor contracts, companies can find ways to reduce the complexity of the payment process. For example, a firm might have built a specific, multi-step payment structure before a period of growth. They may now have the resources to automate the payment process and minimize their administrative work, allowing them to allocate more resources to other areas of the logistics process.
Eliminating Overcharges and Duplicate Billings
Simple mistakes can have high costs within large contracts. Working with large vendor accounts, administrators can easily make a typing mistake or duplicate an invoice. Administrators might also miss overcharges on their accounts. This can lead to the organization overspending by thousands of dollars per year. The ideal contract audit tool can simplify contract oversight and pinpoint potential billing errors before they impact the company. These tools can also reduce duplicate billings, and help the organization retain strong relationships with their clientele.
Preventing Potential Legal Challenges
Many companies have become embroiled in legal issues and fined as a result of improper payments made by vendors on their behalf. This can lead to a loss of faith in the company, and a long, drawn out investigation that impacts the firm’s productivity in the long-term. A comprehensive and flexible audit process helps analyze vendor contracts for potential legal issues and helps protect the organization against damaging cases in the future.
By auditing their vendor contracts using the latest marketplace tools, organizations can limit their logistics costs, streamline their service to customers, and protect their brand for the long-term. To learn more on the benefits vendor auditing can offer your firm, speak with our market specialists today!