A strategic virtual card driven approach to help you tame the tail

Managing tail suppliers

Recent disruptions, like the pandemic, geopolitical crisis, and raw-material shortages have challenged companies to make substantial changes to the way they manage their day-to-day procurement and operations effectively. Nowadays, procurement leaders are focused on improving their overall cost control strategy like never before and the most traditional way to move forward is to focus on the 20% of suppliers that represent 80% of the total spend. However, the tail end of the supplier base with the remaining 80% of the less or non-strategic suppliers is often left behind when targeting similar improvements. Therefore, the question remains how procurement leaders can better manage the large community of tail suppliers with smarter and more effective strategies that allow for more efficiencies within the team, and at the same time provide more grip and pro-active control on the less frequent and lower value transactions?

The time spent on tail suppliers often creates an imbalance in the work of the purchasing department and therefore procurement professionals relatively spend a lot of time when buying a variety of low-value products and/or services that are only purchased a few times per year or even just once. In many cases, there is little or no insights into the expenditure and purchasing behavior of internal buyers and these tail suppliers. When mapping out the costs, it is important to put the entire purchasing process under a magnifying glass. This not only provides insight into the direct purchasing costs, but also the indirect purchasing costs. Consequently, these costs vary from sourcing, expediting, vendor onboarding, and invoice handling to logistics operations.

By processing your tail spend in our intuitive Q-Card application, you bring overall spending under management by reaching an efficient supplier base with opportunities for both direct and indirect cost savings. The creation of vendor master data is no longer neccessary, just like high costs and time-consuming onboarding for those infrequent or one-time tail suppliers. Q-Card allows you to have more control over the behaviour of your internal buyers/ requestors throughout multiple departments with predefined and structured worksflows. Centralized and integrated reporting with your backbone and financial systems gives you full control and visibility over all your business expenses. Allowing corporate buyers to purchase products and services with pre-approved budgets and pre-funded virtual cards will also allow you to reduce risks, optimize working capital and cash positions.

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