CFO Guide: Enterprise Procurement Cost Management

1, the cost of procurement planning.

The accurate purchasing plan can accurately predict and grasp the production plan of an enterprise, which enables the enterprise to minimize the occupation of procurement funds on the premise of meeting the needs of product production, and at the same time, carries out a comprehensive analysis of the supply market, adjusts the order plan, and estimates and selects suppliers.

Procurement planning can be said to be the first step in purchasing the whole process, and its expenditure is also known as the cost of procurement planning.

2, raw materials,

Or finished product cost.

The cost of a semi-finished or finished product is the price of goods purchased.

There are many reasons that affect the price of purchased goods, including commodity market price, commodity quality, market supply and demand, etc.

3, procurement management costs.

The cost incurred in the course of purchasing business is the cost of procurement management.

It includes manpower cost, bidding cost, construction cost, entertainment expenses, office expenses, travel expenses and so on.

4, pport costs.

The pportation of purchasing materials is bound to incur the cost, which is the cost of pportation.

Choosing a scientific, economic and reasonable mode of pportation will save a lot of pportation cost to enterprises.

Enterprises with a certain scale and strength should attach more importance to the pport links and standardize and specializes the procurement process.

Choose the right means of pport, plan a reasonable pport route, thereby saving freight and reducing procurement costs.

5, acceptance cost.

Raw materials, semi-finished products or products purchased must be inspected before they can be put into storage.

In order to prevent the storage of raw materials, semi-finished products or semi-finished products which do not conform to the contract agreement or quality, the inspection of materials must be strictly checked.

Once the product is found to be unqualified, damaged or short of quantity, or even the product variety is wrong, the enterprise will face not only the cost and time cost needed to replace the goods due to the variety, quality or quantity problems, but also may cause the production line to stop operation due to the shortage of raw materials or semi-finished products, resulting in the cost of shortage.

6, warehousing costs.

Warehouse storage cost refers to the cost of goods in the inventory process.

On the one hand, the goods should be stored properly, and the goods should be classified and managed. The storage environment of some special properties, such as easily damaged products and deteriorating products, should be paid special attention to.

On the other hand, it is necessary to establish and maintain the inventory files properly, and inventory the inventory items in time. If there is a backlog of inventory, it will also increase the storage cost.

Therefore, scientific and reasonable warehousing management is an effective means to reduce the cost of procurement and supply.

Implicit cost

Implicit cost is relative to explicit cost.

Implicit cost is a part of the cost which is not easy to be ignored in the financial statements, but also a very important part, for example:

1, time cost.

The time cost resulting from excessive customer response.

2, shortage cost.

The shortage cost is the loss caused by the exhaustion of stock or the interruption of supply, which can not meet the normal production and operation needs of enterprises.

This part of the cost is not reflected in the financial statements, but once the shortage occurs, it will not only bring great economic losses, but also have a great impact on the reputation of the enterprise.

3, inventory backlog costs.

The relative shortage cost and the backlog cost are the costs caused by overstock caused by excessive inventory products.

The backlog of inventory has increased the cost of pportation and warehousing, and also occupied the development funds of enterprises.

At the same time, in the warehouse storage process, there will also be some factors such as improper storage and so on, resulting in the loss of product damage.

Therefore, excessive inventory is also not conducive to the development of enterprises.

4, other easily overlooked costs.

The sum of explicit cost and invisible cost in the above procurement activities is called total cost of ownership.

In carrying out the procurement business, we should proceed from the cost of procurement ownership, and at the same time, distinguish the key points of procurement cost according to different materials, analyze the factors that affect the procurement cost, and formulate targeted procurement plans and strategies, so as to achieve the goal of lowest procurement cost.