Businesses and organizations often have an annual spending budget set aside for things such as advertising, office supplies, travel expenses and other associated costs needed to operate. The decision on where to spend that money usually takes time and research so it can be stretched to last the entire year.
Whether you have a limited budget or larger budget, December is a great time to invest any left over money into last minute purchases. Not only will it jump-start your financial planning when January 1st rolls around, but the holiday season typically provides discounted offers on various items.
To help you plan for the new year, we put together a list of 4 factors every purchaser should consider when managing an office supply budget.
1) Determine Your Costs
Setting a spending budget is the first step in managing your costs. For existing companies, knowing how much to spend on office supplies might already be established. However, if you're a new company starting out it will be a bit trickier.
A good starting point is to consider the size of your office. A smaller office of 4-15 employees will not need to spend as much on office supplies as a company with over 50 employees. Depending on the industry and how many employees your company has, an office can spend anywhere from $200 to $1,000 per employee on office supplies per year. To estimate your monthly costs, divide the total amount of supplies bought by 12 or the number of months the supply is expected to last.
You should also budget for unexpected occurrences throughout the year. Perhaps your office ran out of supplies sooner than expected or new employees were added to the team and your initial calculations are falling short. To prepare for this, businesses will often set extra cash aside for refilling stationery and new hire welcome packages.
2) Track Inventory
Before purchasing new supplies, it's beneficial to review your current inventory to see what you already have. It's better to purchase items you need than to waste time ordering duplicate products. As you're checking inventory you might be surprised to find items that went unused. Ordering Rubber Finger Tips might have seemed like a great idea at the time, but if they're just collecting dust it's safe to say they are not popular with your office. Take note of these items and get insight from the rest of the office to see what supplies they are using the most.
To further maintain inventory, use a free spreadsheet tool like Google Sheets to keep track of stock levels. As items start to get used, periodically go back and update your spreadsheet to get an idea on what items need to be replenished when it's time to reorder.
Lastly, you will want to consolidate your supplies in one central location. It might make sense to disburse supplies throughout the office so your employees can access items wherever they are, but this will throw off your inventory. Storing all your supplies in one place will provide more accuracy and help you make smarter buying decisions.
3) Research Vendors
One of the main responsibilities for a purchasing agent is to analyze prices, financial reports and other information to develop profitable purchasing strategies. When it comes to buying office supplies, be a bargain shopper and search around for the best deals before making a decision. More times than not, going directly to the website of the supplier will save you money. On our website alone you will find most of our products cost 15% less than Staples or Office Depot. If you're in a pinch and don't have time to research thoroughly, retailers like Amazon and Walmart are great places to find discounted supplies.
Other ways to save are by purchasing last year's models or off brand items. Most unbranded products offer a similar quality, but for less. Take our Medical Arts Press match products for instance. You get the same finished good you will find on Quill.com, but at a discounted price because we manufacture these ourselves.
While vendor searching, it is important to be strategic about where to spend your budget. We recommend choosing one or two vendors and sticking with them. Not only will it save you time on future orders, but it will allow you to build better relationships with them. Many suppliers offer price breaks to repeat or first time buyers so they can keep you as a loyal customer.
4) Set a Reorder Point
A reorder point indicates when you should order more products, based on a threshold you set so inventory doesn't go below a certain level. Establishing a reorder point will ensure your office supply needs are always met. To calculate your reorder point, consider how much the item is being used and how quickly. Aspects like shipping speed and unforeseeable delays should be accounted for as well. Fishbowl provides a free online calculator that you can use to help decide your reorder point.
If a reorder point can't be determined right away, consider ordering products in bulk to extend the supply. Most of our customers that order in bulk are reordering every 2-3 months to restock depleted inventory. Whether its paper products or pens, you will want to keep tabs on how much you have on hand to know when it's time to place a new order.
Another simple solution is setting up an automated reorder process. Many suppliers offer recurring order plans that allow a business to choose the quantity and how frequent products get delivered to them. Not only does this eliminate the chance of a reorder being forgotten, but it creates a more consistent inventory management system.