Take a look at your office invoices, and you’ll probably see you’re spending a lot of money on supplies. This is part of business – spending money on your business operations makes sense – after all, you wouldn’t be able to complete your work tasks without supplies. On the other hand, businesses often spend more money than they need on office supplies, effectively losing some of their bottom line. Effective sourcing and utilization of office supplies is important in managing your costs and streamlining your business operations. No matter your business size, there are steps you can take to optimize your business supply and distribution.
Know the Hard & Soft Costs of Office Supplies
Most businesses know their hard costs, which we define as the amount a company spends on physical things like paper or copiers. Harder to determine, however, is the amount you spend on “soft costs.” Soft costs are tricky because they can be hard to quantify. But some examples of the soft costs associated with office supplies include:
- Researching office products
- Finding the best price for supplies
- Getting quotes from vendors
- Paying invoices
- Clearing up discrepancies in billing
From these examples, it’s easy to see how you can get bogged down in calculating soft costs. Say, for example, that you pay a worker $15 an hour to source, quote, and order products and supplies. Your soft costs could easily run into hundreds of dollars each month, and they add up quickly.
Do an audit and see how much you’re really paying on office supplies each month, including both hard and soft costs. Is it more than you expected?
Keep Better Track of Your Orders
This seems like an obvious tip, but it’s a good one. One of the easiest and most effective ways to manage your office supply costs is to diligently record everything you order. Find a system that works for you, and assess your patterns month-to-month, even week to week. Are there periods when you go through more than expected? Does your company experience “peak times” for office supplies? For example, a CPA’s office likely goes through more supplies between January and April than they do May through December. Keeping an eye on purchasing trends will help you order the correct amount of supplies ahead of time.
In other words, you won’t be ordering too many supplies during off periods nor will you have to pay a premium for a rush order when you’re in a pinch.
Consolidate Your Supply Ordering
Does your company have multiple departments making multiple orders? If so, you might be wasting money on inefficiencies. Hiring a designated purchasing manager can be effective in controlling your office supply costs. A purchasing manager will authorize one invoice and one shipment, as opposed to multiple departments submitting different requests, which can only create confusion and redundancies.
Working with a single purchasing manager and supplier is not only more cost-effective, it’s better for the environment. Less ordering, less transportation, and fewer shipments means you’re reducing your company’s carbon footprint. Plus, consider that an office supply order can cost upwards of $90 to procure, and you’ll find it makes sense to have a centralized system.
Store Your Supplies in a Centralized Location
If you’re in a larger office, you might store your most popular office items in small areas throughout the office. This makes it convenient for employees to find things like sticky notes, pens, and paperclips whenever they need them. Unfortunately, it also makes it easy for things to get misplaced, forgotten, or miscounted. For example, if an employee snatches a big box of labels and forgets about it, you could be ordering more needlessly.
Instead of small supply “pockets,” put all of your supplies in a large, central location. Employees will have to walk farther to get them, but they’ll more likely only get what they need.
Create a Budget, and Stick to It
Based on your research on supply use trends and spending, you should be able to come up with a budget for your office supplies. Making this budget will be an important step in managing your costs and maintaining a reasonable range on office supplies. Keep in mind, your budget may be increased as your business grows. While it can be somewhat flexible according to your business needs, try your best to stick to the number you come up with. Make a note to revisit it each year or even every quarter to track your progress.
Outsource Your Management
If you’re looking for a way to avoid overspending, soft costs, and hiring a purchasing manager, consider outsourcing your office supply management. With an outsourcing partner, you can focus on the tasks of running a business while they tend to restocks, orders, or quoting, among other things.