Accountants demanding ‘open book’ approach to purchasing
ACCOUNTANTS are leading the charge into a unique method of ‘open book’ purchasing which is driving down costs, say procurement experts.
Banner Business Services, which supplies office and stationery to accountancy practices including Deloitte, E&Y and PwC, says a move towards agreeing acceptable margins with suppliers in an open, transparent way at the start of a contract is revolutionising the purchasing process in the accountancy sector.
Originally adopted by the Government when it awarded a £37m annual contract to Banner to supply office products, ‘open book’ is a novel approach whereby the company is transparent with its customers about the true cost and profit margin for individual items of stationery.
Both agree a fair and reasonable profit at the outset, taking in the cost of elements such as raw material, picking, handling, packaging and delivery.
Richard Costin, managing director at Banner, explains:
“Buying in this way is common practice in sectors like engineering but we’re the first to introduce this approach to the world of office stationery and products.
“The key is transparency. Each item is individually costed at the start of a contract and a fair and reasonable profit margin agreed by both parties. Customers know exactly, to the penny, how much a product will cost their business and have a transparent view of the ‘cost to serve’ and therefore, our profit margin.
“Leading organisations including Virgin Media, Barclays, Aviva and McDonalds already use this service from Banner but accountants are switching to the ‘open book’ managed procurement model more enthusiastically than most in the private sector.
“Quite simply, it increases efficiency and cuts costs.
“Traditionally office suppliers have split their product ranges into ‘core’ items sold at cost and ‘non-core’ items sold at significant higher mark-ups. We’re seeing a revolution in the way that accountants purchase their office supplies. The future is in our ‘open book’ approach.
“Too many businesses are still paying too much for their general office supplies. If HMRC and three of the Big Four accountancy firms are adopting our ‘open book’ model, then our strategy on costs must be right.
“Purchasing directors and finance directors at accountancy practices like to see the bottom line of each product. It’s a system that’s paying dividends in the public sector and is quickly being taken up by accountants, too – who better to know a good deal when they see one!”
Banner is one of the leading suppliers of office products and services in the UK and Ireland.Banner’s parent company is office2office which is listed on the London Stock Exchange.Group turnover in 2010 was £207.6m compared to £187.5m in 2009.The company employs more than 1000 people across the UK with offices in Norwich and depots in Hampshire, Manchester and Northern Ireland. Banner routinely makes more than 7,500 deliveries every day to customers.70 per cent of orders are processed electronically. See www.banner-online.biz