Tangible Rewards from Increased Efficiency

Jeff Beall, Vision Software Solutions
May 13, 2005

Credit union administrators generally discover that the cost of doing business is an unpleasant surprise. Budget and spending analysis reveals vast expenditures for services, goods, inventory, and contracts, to which must be added the large costs for the management of these purchases. These expenses erode the bottom line. Automation of the procurement process, accompanied by ease of reporting and budgeting, quickly pays for itself in the return of operating funds to the organization.

Manufacturing and retail segments enjoy a reduction in overhead through innovative purchasing and inventory management. Credit unions, though not concerned with sales, generally have many of the same costs of doing business. Internet searches for purchasing software used by credit unions show that this cost-containment strategy is growing. How a credit union acquires office supplies, deposit slips, application forms, marketing materials, furniture, and equipment affects its members.

Members of credit unions expect their funds to be used wisely. The administrative costs of purchasing a stapler or an ATM are the same. Quotations, requisitions, purchase orders, invoices, and receipts are necessary no matter what the purchase. Increase the bottom line by implementing a solution that will not only automate the procurement process, but also:

• Develop and track cost center and departmental budgets
• Uncover and reduce duplicate purchases, oversupplies, waste, and maverick spending
• Quickly and easily highlight key performance indicators and cost-tracking metrics
• Produce departmental billing, G/L account, and purchasing reports with a few clicks of the mouse
• Forecast need for goods and services based on historical usage
• Negotiate contracts for goods and services using past purchase history as leverage
• Enable departments and locations to place and track their own purchases

Every dollar saved goes directly to the bottom line – no member retention, marketing, or customer service is necessary for this sort of earning to take place! Several examples highlight a few of the possible cost savings and benefits from the use of a consistent, cost-effective, purchasing system.

Case Study 1

A credit union in Florida automated its purchasing process. The CU’s new purchasing agent, who had used an automated system at his previous job, was able to consolidate all the service and maintenance contracts for all the printers and copiers throughout the institution. This single act yielded savings in excess of $30,000 for the first year.

Cast Study 2

A credit union in Pennsylvania was using a single vendor for all their office supply needs. Utilizing the reporting and tracking options within their purchasing software, they were able to create requests for quotations based on the actual usage over the previous year. Realistic requests and quotations led to savings on many items of up to 50% annually. The purchasing agent responsible for these savings was promoted to facilities manager.

All the applications above can be handled by Purchasing at a Glance (PAAG), a product of Vision Software Solutions that is specifically designed to meet the needs of financial institutions. It is used by purchasing agents, marketing managers, IT administrators, operations officers, CFOs, and branch managers. PAAG is utilized by more credit unions than any other purchasing solution.

Jeff Beall is executive vice president of Vision Software Solutions, which developed Purchasing at a Glance (PAAG). This article first appeared on the Callahan & Associates website at www.creditunions.com and is reprinted with permission. To learn more about Purchasing at a Glance, visit www.PAAG.com.