Want To Create A Successful Procurement Strategy – Here Are Top 8 Steps To Analyze

Are you getting the best deals? Are you spending too much on services and products? Is your organization buying from too many suppliers? Or not enough? What about your invoices? Are they being paid promptly, are there errors on them, or is it difficult for your accounting department to balance the books because of all the different purchase orders coming through?

If any of these questions resonate with you and your company, click here now! Below we will explore ways to create a successful procurement strategy. You’ll learn how to spend less time, get better results and make smarter decisions.

Step 1 – Decide Who to Buy From

There is never going to be a perfect answer. You need to find a supplier that will best fit your needs – and this is not easy! Does this supplier have the capabilities you need? Are their costs the same or lower than the competition? Do they deliver in time, or at all? What about their reputation and feedback from previous customers? Will it translate into future orders or transactions?

Ultimately you need to ask yourself a few questions to decide who you want to buy from. For example, at the end of this process, will you be happy with the supplier you choose, and will they bring you more business in the future?

Step 2 – Document Everything

You need to know exactly how much it costs to buy from each supplier. You should have a list of services and products that you regularly buy, along with the amount spent on each product or service. You can then compare them against each other to get a better idea of where you can find savings. When it comes time to renegotiate your contracts with suppliers, this data will be invaluable.

Documenting these details will not only help you compare the cost and quality of different suppliers, but it will also show you the value of each supplier to your company.

Step 3 – Negotiate in the Beginning

No matter what kind of business you’re in, negotiating a contract always saves money in the end. The key to successful negotiations is to remain calm, approach negotiations with a ‘win-win’ mentality, present your case, and be prepared for any questions that may be addressed during the negotiation.

Of course, each negotiation is different, but using these tips with your detailed documentation will give you the upper hand in any negotiation.

Rather than waiting to renegotiate next time, go back to the drawing board and negotiate it now.

Step 4 – Renegotiate Regularly

You should review and renegotiate all contracts regularly. This saves time and effort and makes sure that the contracts you’ve signed are still relevant to your business now. Of course, there isn’t always a need to renegotiate every contract – some will work just fine as is. But others will need to be renegotiated to ensure that the terms and conditions of the agreement are still applicable.

Step 5 – Invoice All Contracts

Once you’ve negotiated all contracts, it’s time to send out invoices for payment. The invoicing process is fairly straightforward, but as a small business owner, you may not have a very clear process in place. Document how much you spent on each supplier so that you can easily calculate your profit over time. You can use your data to negotiate a better contract.

Step 6 – Pay All Suppliers on Time

Paying all suppliers on time isn’t always easy. Whether you have a single, large supplier or multiple small ones, paying everyone at the right time is essential. If you’re short of funds, knocking up a quick payment schedule in Excel should help you keep track of how much needs to be paid, when and to whom. If you happen to be short on cash, then negotiate using the invoicing data. That way, the supplier will know that they will only get paid if they agree to your terms. 

Step 7 – Use a Third Party to Help

There are many third-party payment options that you can use to manage your financing more efficiently. These options will make it easier to receive your money from different suppliers and pay them on time. Some of these options include services like PayPal and Alipay or even companies like Intuit, which can provide you with accounting software. This efficient use of technology will help ensure that your accounts are always up to date and that you’re receiving payments when you need them. 

Step 8 – Respond Quickly to Problem Invoices

You will receive a true range of invoices regularly. Some will be correctly filled out, and there will be no problems. Others will have errors or missing information, but most importantly, there will be those that cannot be processed at all! Those are the ones you need to respond to immediately and make sure they are processed correctly so that your suppliers get paid as soon as possible. If a supplier doesn’t get paid in time, they may choose to stop providing their services to you altogether.


As you can see, creating a procurement strategy is not a simple task. It requires an in-depth understanding of your industry, the market, your business, and your company’s goals to find suppliers that will work for you. Remember that if you don’t want to stick to the same suppliers again and again and want full control of which suppliers you’ll do business with, you will have to take the time upfront to research them.