Spend Analysis is the starting point for procurement.
The key reports to extract are:
Your top suppliers by spend
This report should be run on at least an annual basis. The suppliers at the top of this list should be added to your contracts register to record if a contract is in place, what efficiencies have been achieved with this contract and when that contract is up for renewal.
The key considerations for this area are achieving value for money (VFM) and do we have a compliant contract (e.g. EU procurement regulations) in place on the college's terms and conditions.
Your top suppliers by number of transactions
This report should be run when tackling process efficiencies within the college. The suppliers that head up this list should be targeted for invoice consolidation, Government Procurement Cards (GPC) and e-Invoicing.
Your top suppliers by commodity code
This report is important for identifying spend fragmentation so that opportunities to pull spend together and reduce the number of suppliers used by the college can be realised. This is also an important report for identifying contract compliance as it is the amount spent on ‘similar’ goods and/or services being bought that also triggers EU regulations as well as the amount spent on a contract.
Further guidance is available from the Guidance Document - Management_Guide - How to manage influenceable spend with FE Colleges. and from the Toolkit A Guide to Supplier Spend Analysis.