The Importance of Managing Goods Not For Resale Spend
In a retail business, managing Goods-Not-for-Resale (GNFR) spend is crucial for maintaining profitability and ensuring long-term success. GNFR spend refers to the expenses incurred on items that a business purchases for its own use, rather than for resale to customers. These can include items such as office supplies, fixtures, and equipment. Although GNFR spend is not directly tied to revenue generation, it can still have a significant impact on a retail business’s bottom line. Therefore, it is important for a retail business to develop and implement strategies to manage GNFR spend effectively.
Beginning stages to managing GNFR spend
When first starting to manage GNFR spend, conducting regular reviews and audits of all expenses incurred by the company is a good start. This can be done by reviewing financial statements and invoices, and by conducting interviews with employees to identify any additional expenses that may not be reflected in the financial records. By analyzing all expenses, a business can start to identify which items fall under the different GNFR categories and understand the overall spend on these items. This information can be used to identify areas where cost savings can be made and make adjustments accordingly.
Centralizing GNFR purchasing
As your organization matures, they can implement a centralized purchasing system and department. This can be done by creating that purchasing department or designating a specific employee to handle all GNFR purchases. This will allow the business to have better control over the purchasing process and to negotiate better prices with suppliers. Additionally, it will also help to standardize the purchasing process and reduce the risk of duplicate purchases.
Budgeting is key to managing GNFR
Another strategy to manage GNFR spend is to implement a budgeting system. This can be done by setting a budget for each category of GNFR expenses, such as office supplies, fixtures, and equipment as referenced above. By setting a budget, a business can better control its spending and ensure that it does not exceed the budgeted amount. Additionally, it will also help to identify any potential cost savings and make adjustments accordingly.
Digitizing GNFR purchasing
A retail business can also manage their budgets by implementing a spend management system to monitor and control GNFR spend. These systems can help businesses automate their purchase processes and track expenses in real-time. This allows businesses to quickly identify and address any issues that may arise, and to make adjustments as necessary. Additionally, it can also help to identify any potential cost savings and negotiate better prices with suppliers.
Managing GNFR leads to increased profitability
In conclusion, managing GNFR spend is crucial for a retail business to maintain profitability and ensure long-term success. Implementing strategies such as conducting regular reviews and audits of expenses, implementing a centralized purchasing system, implementing budgeting systems, and using spend management systems can help a retail business to better control and manage its GNFR spend. By doing so, a business can increase its profitability and ensure long-term success.
Lumatrak’s PULSE software offers you tools that will help make sense of the chaos by connecting the processes, systems and communications supporting your purchases from the time of purchase to final delivery to your site.