Save, save, save – the top priority in every market economy institution. But many buyers and managers only think about reducing prices on the cost side. This means that they try to exert pressure on the service providers to give them better conditions. They often think that the cheapest is the best for the company. But far from it. We show what really matters.
Why the price of a service is not always the most important thing
I take the couriers now as a prime example of what can go wrong in a company when you try to save money desperately and then shoot yourself in the leg. In controlling, there are the so-called process costs. Such costs arise because someone in the company has to carry out an internal activity that was triggered by a cost driver. In accounting, for example, every invoice causes processing costs. Even if only few euro are computed, the treatment costs always the same much.
If a company has many invoices with small amounts, then more accountants have to work there than in a company that only receives a few invoices, but with large sums. This also applies if both companies have exactly the same turnover. It is these cost drivers that ensure that some companies set up oversized overhead cost areas.
Unfortunately, many managers do not think in such categories because they may be unfamiliar with the subject or do not know the subject. Therefore, they usually only look at the purchase prices and decide on the basis of their amount.
However, a good express courier is not always only determined by the price, but also by the extent to which its services have an impact on process costs.
For example, it is very important that orders are processed quickly and easily. Ideal for this is, for example, an online input mask in which you enter when, where and what is to be transported and the driver then comes and picks it up. Forms, paperwork, complicated ordering processes would only eat up working time on the part of the customer. Therefore, one would simply have to weigh up how often orders are placed and how long it takes. The faster, the better for the customer.
A lot can also happen when it comes to invoicing. If, for example, you have to send many parcels or shipments, you have an advantage if not every single transaction is billed. Instead, it would be better if a collective invoice were sent once a week, 14 days a week or once a month, on which all deliveries are recorded. For example, the accounting department may have to process only 12 invoices per year instead of 100. If you handle all your suppliers in this way, you can get by with a small accounting department. It would be even better if the order and payment systems of the courier service and the customer could be interlinked in IT.
Of course, how fast the service works and how reliable it is also plays a role. What’s the point of saving a few euros if you have to call all the time to make a complaint or iron out a mistake? Poor quality has a much higher price than you think.
Only if one considers such factors appropriately as a company and calculates them correctly, then one has found the ideal express courier and achieved actual savings.