PURCHASING AUDIT & MONITORING

AOIC consultants receive more calls from concerned clients about purchasing than any other subject. In the press there are articles about how contractors retain discounts and staff restaurant customers continually complain about the price of eggs, fruit and yoghurts.

All contractors claim to buy very efficiently yet the prices on the supplier invoices can look very high. When prices are challenged the response is clouded by delivery costs, supermarket loss leaders and seasonal variances.

In reality, contractors rely upon a certain level of discounts to maintain their operating margins. However, clients should benefit from the purchasing power of the contractor that an In House operation would not achieve. Finding the right balance of discount return is an art in which AOIC consultants excel.

If provided with copies of one month of your total food and consumable invoices, we will be able to advise you of how much your contractor is earning from trade discounts. We benchmark the individual cost of every item against our database. In most cases the price check is for the same commodity from the same supplier.

The value of the discount should always be set against the contractors required earnings with the balance being the management fee or a credit note.

Once the evaluation process has been completed it becomes easy to maintain a monitoring system to ensure prices remain stable.