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Literature Review About Spend Analysis

The control of costs due to the increased recession outcomes realized in different economic basis assists in the limitation of adverse results, supply management and the supply procurement (Presutti 2008). The lack of growth due to inappropriate accumulation of revenue generation results in cutting costs by business entities to facilitate profit maintenance. The reduction of the operational costs, which is conducted internally in the business, is no longer operational. On the other hand, the reduction in the supply chains costs is currently used by business entities in the expenditure reduction and maximization of profits (Essig & Arnold 2011).

The use of effective corporate patterns in spending results in the realization of reduced expenditure and unreliable costs. The creation of awareness of the types of products purchased, determination of the competent supplier of the products and the actual amount spent on the various products should be enhanced to the different business fraternities. This assists in reducing the costs of purchasing the products and limits the chances of buying low quality and counterfeit goods. In addition, the business is aware of the genuine suppliers or limit purchasing products from middlemen (Pandit & Marmanis 2008). The research conducted by various scholars indicates that the different business operators are currently aware of the advantages and relevant benefits related to spending analysis. However, the numbers of business enterprises that have frequent analysis of spending are less than fifty percent. In addition, the business entities and enterprises that make use of spending analysis programs fail to make effectively use of the program in analysing the business’s total spending.

The management of any business has the mandate to analyse the market trends and predict future outcomes in businesses. The employment of educated, experienced, and hardworking management team leads to the realisation of low costs of expenditure and maximisation of profits (Villamil 2005). Clarity and diversity in the formation of the various spending patterns in businesses should be a key feature during the hiring of the management team and should be often addressed in board meetings. The frequent analysis of the operation of the total spending analysis gives minimal occurrences of impulse and unwanted expenses and availability of total profits. Spending analysis acts as a fundamental tool in the research and study of the supply management and procurement tools (Cox 2011). The analysis assists the various companies and business organisations in the limitation of spending in unnecessary ways and means. Maximisation of profits is a major realisation in businesses and companies implementing spending analysis in their relevant fields.

Accumulation of profits and savings are the main objectives of all businesses, companies, institutions and organisations. However, there are numerous businesses that close down due to mismanagement of funds. Excessive spending is one of the numerous avenues that facilitate the downfall of a business. The realisation and use of spending analysis in companies and businesses limit the actual amount of expenses and facilitates expenditure on relevant commodities and services. Profit accumulation is maximised through the use of spending analysis in the different business involvements. The lack of growth due to the inappropriate accumulation of revenue generation results in cutting costs by business entities to facilitate profit maintenance. This assists in reducing the costs of purchasing the products and limits the chances of buying low quality and counterfeit goods (Essig & Arnold 2011). In addition, the business is aware of the genuine suppliers or limit purchasing products from middlemen. The research conducted by various scholars indicates that the different business operators are currently aware of the advantages and relevant benefits related to spending analysis.

The improvement of business processes is boosted through the provision of spending analysis. In addition, the procurement processes are managed efficiently without excessive spending and expenditure. Directions on the usage and implementation of new and current market strategies and tools are adequately realised and applied through the utilisation of spending analysis tools. The facilitation of accessibility and usage of underlying funds and opportunities in the market and within the business organisations is a key enhancement of profits. Spending analysis governs and establishes the use of different business modes in the achievement of various researches on the fluctuating markets (Bowersox & Cooper 2012).

The efficiency of spending in the deliverance of contracts and payment in the different supply chains offers a fundamental opportunity to the business entities and organisation (Essig & Arnold 2011). According to the research conducted by different research practitioners, excessive expenditure is usually realised in companies and businesses that offer contracts to various companies or entities. There are expenses that are usually realised during the payment and deliverance of good working relations with the companies that have been awarded different tenders and contracts. The various contractors take opportunities due to poor record keeping and lack of careful analysis and request of various funds and services which do not fall in the contracts. The lack of growth due to inappropriate accumulation of revenue generation results in cutting costs by business entities to facilitate profit maintenance (Kreyszig 2009). This assists in reducing the costs of purchasing the products and limits the chances of buying low quality and counterfeit goods.

The management of the supplier in the realisation of quality products is essential for the business enterprises. The availability of counterfeit goods acts as the beginning of the company’s or business’s downfall (Moore 2004). This is because of low realisation of sales due to the establishment of fake goods by the various clients and customers. The business entity or company should establish means of establishing various company rules that governs the flow of the products from the suppliers to the clients. In addition, the suppliers of different commodities raise their costs of transportation and costs due to the ignorance of their customers (Altshuler 2006). The business organisation therefore establishes enquiries in the various markets in the establishment of fair prices of the goods and services through spending analysis. On the other hand, the business management through the use of spending analysis can purchase the various goods from the manufacturers other than from the various distribution entities. The realisation of these factors in business reduces the spending rates and expenditure thus increasing the profit margins (Becker 2006).

Risk management is a key feature in creation and establishment of the business enterprises, companies, organisations and institutions (Porter & Hannon 2004). There are different risks that are associated with business in the different companies and business formations. Some risks and outcomes can be preventable through the implementation of spending analysis in the business fraternity (Cox 2011). The reduction of the operational costs, which is conducted internally in the business, is no longer operational. On the other hand, the reduction in the supply chains costs is currently used by business entities in the expenditure reduction and maximization of profits. The frequent analysis of the operation of the total spending analysis gives minimal occurrences of impulse and unwanted expenses and availability of total profits (Greenfield 2005). The lack of growth due to inappropriate accumulation of revenue generation results in cutting costs by business entities to facilitate profit maintenance. This assists in reducing the costs of purchasing the products and limits the chances of buying low quality and counterfeit goods (Croom 2007).

Research indicates that the payment of business services and goods by the various companies and business organisations accounts for an approximation of 98%. The 2% realised stands for the errors and price fluctuations. The research conducted by various scholars indicates that the 2% realised in the different payment methods account for a huge amount of money (Kendall & Kendall 2002). Spending analysis through procurement and supply chains can facilitate the establishment of detailed accounting and payment procedures that limits the availability of these errors thus maximising the profits of the different companies and business entities (Thomas & Griffin 2006). The facilitation of accessibility and usage of underlying funds and opportunities in the market and within the business organisations is a key enhancement of profits. Analysis on spending in the deliverance of contracts and payment in the different supply chains offers a fundamental opportunity to the business entities and organisation. This assists in reducing the costs of purchasing the products and limits the chances of buying low quality and counterfeit goods (Villamil 2005). The business entity or company should establish means of establishing various company rules that governs the flow of the products from the suppliers to the clients.

In conclusion, the different companies and business enterprises should implement the use of spending analysis in their establishments to minimise on spending and maximise profits (Puschmann & Alt 2009). Research shows that spending analysis facilitates the control of costs due to the increased recession outcomes realized in different economic basis assists in the limitation of negative outcomes, supply management and in the supply procurement.

References

Altshuler, A 2006, The city planning process: A political analysis, Cornell University Press, London.

Becker, G 2006, An economic analysis of fertility, Demographic and economic change in developed countries, pp. 209-240.

Bowersox, D & Cooper, M 2012, Supply chain logistics management, McGraw-Hill: New York.

Cox, A 2011, Understanding buyer and supplier power: a framework for procurement and supply competence, Journal of Supply Chain Management, vol. 37, no. 1, pp. 8-15.

Croom, S 2007, Restructuring supply chains through information channel innovation, International Journal of Operations & Production Management, vol. 21, no. 4, pp. 504-515.

Essig, M & Arnold, U 2011, Electronic procurement in supply chain management: an information economics‐based analysis of electronic markets, Journal of Supply Chain Management, vo. 37, no. 3, pp. 43-49.

Greenfield, D 2005, Spend Analysis: The First Step in Strategic Sourcing, Institute for Supply Management, pp.33-76.

Kendall, K & Kendall, J 2002, Systems analysis and design, Prentice-Hall, London.

Kreyszig, E 2009, Introductory functional analysis with applications, wiley, New York.

Moore, N 2004, Spending Analysis, Rand Corporation, CA.

Pandit, K & Marmanis, H 2008, Spend analysis: the window into strategic sourcing, Ross Publishing, NY.

Porter, A & Hannon, D 2004. Super Spend Analysis, Purchasing Magazine, vol. 18, pp. 33-65.

Presutti, W 2008, Supply management and e-procurement: creating value added in the supply chain, Industrial marketing management, vol. 32, no. 3, pp. 219-226.

Puschmann, T & Alt, R 2009, Successful use of e-procurement in supply chains, Supply Chain Management: An International Journal, vol. 10, no. 2, pp. 122-133.

Thomas, D & Griffin, P 2006, Coordinated supply chain management, European journal of operational research, vol. 94, no. 1, pp. 1-15.

Villamil, D 2005, Supplier Sponsored Spend Analysis: An Emerging Best Practice, Procurement Insight, vol. 4, no. 1, pp. 221-412.

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