Budgeting Content

A clear trend in the procurement journey to over-budget and underspend

procurement analysis

Business spend management integrated solutions provider, Proactis, and its data analyst team, has recently invested some time studying and analysing the data it has accrued from its substantial customer base and their procurement exercises. It has produced some interesting findings pertaining to spend surplus from procurement exercises. We thought the results would make interesting reading for our audience of CPOs and CFOs and indeed any business leader.

Two standout conclusions from the analysis show that more than one in ten procurement exercises do not yield contracts, and that of total value of average contract, 80% is actually drawn down in the financial year.

Procurement and Finance: How to Close the Budget Loop

Budgeting is obviously one of the most effective ways to meet profit goals and avoid maverick spend. Budgeting and planning help organizations invest their resources to best benefit, based on cautious consideration rather than the urgency to make a short-term decision. They are essential to sustain your company's economic growth. But how do you close the loop between budget preparation, execution and forecast? This can be a challenge. Like William Feather said, “a budget tells us what we can't afford, but it doesn't keep us from buying it.”