Congratulations. You have successfully negotiated and executed an office supplies contract. You have established contract pricing for the most commonly purchased items, set up your office to order online, and negotiated favorable terms and conditions. Now all you have to do is sit back and relax. Wrong!
What most people don’t realize is that office supply vendors often structure your contract with a number of hidden items that, if not monitored for compliance, can lead to higher costs, lost incentives/rebates and/or penalties. Consistent monitoring helps you to maximize savings, minimize those penalties, and control your supply budget.
A typical office supply contract with a committed spend over the life of the contract usually contains:
- Contract spend
- Contract pricing
- Non-contract discounts
- Incentives/rebates and/or penalties for volume spend, average order size, etc.
In addition to the monthly invoices, your office supply vendor should be providing you with monthly or quarterly usage reports, detailed by office/location:
- Unit of measure
- Price per unit and total
- Year-to-date quantity shipped
- Year-to-date average price
- Year-to-date frequency
Usage reports are a useful tool to monitor the buying habits of each location, and keep you on track for meeting your contract spend, rebates, and incentives.
Important items to monitor during your contract terms are:
- Spend to Date – This allows you to make adjustments to buying habits to avoid coming up short at the end of the term.
- Contract vs. Non-contract Spend by Office – This identifies end-users who are not meeting the targeted percentage of contract spend, which will yield the most savings.
- Spend Tracker – This helps you to meet the required terms or spend (average order size, percentage of orders placed on line, etc) to maximize additional savings.
- Spend by Attorney by office – This monitors the total spend per office by the number of attorneys in that office. This can be a very helpful tool in budgeting office supply spend for each location.
If you want to avoid headaches and save money, just an annual or semi-annual compliance review will assure you are meeting the terms and conditions of your contract and position you for an easy renewal of your office supply contract.
We’re pleased to deliver these concrete insights; if you have specific questions about your firm’s office supplies contract, however, don’t hesitate to contact Lisa Schneider at lschneider@matternassoc.com and prevail upon our expertise.
