Most purchasing problems don’t look like problems. They look like speed. Someone needs a part, they get it, the job moves on, and the invoice gets approved because the job was urgent and the relationship is good.
That is how a 200-person building services firm was running $60 million of annual spend across 2,400 suppliers and roughly 9,000 purchase transactions a year. The ERPNext Consulting review started with a simple question: how many different prices did we pay for the same item last quarter?
The answer was 11. For a standard pair of safety gloves.
The five leaks nobody writes down
- Approval by email thread. Nine people could approve, nobody knew their limit, and the average approval took 3.5 days — which is exactly how an “emergency” gets created.
- Same supplier, different price per site. Each branch negotiated its own deal, so identical cable trays ranged from $38 to $61.
- Storeroom blindness. 22 percent of orders were for items already sitting in a bin 30 feet away, because nobody could see the bin without walking to it.
- Emergency buying as a habit. 18 percent of spend went out on same-day terms at an average 24 percent premium.
- Expired contract pricing. Discounts negotiated in January were still being invoiced at list price in September, and nobody was checking.
What we changed in the first quarter
None of this needed more people. It needed three rules and one report that anyone could read.
- Three approval tiers with hard dollar limits — under $1,000 by the site lead, $1,000 to $15,000 by the department head, above that by finance. Every limit visible in the system, no exceptions.
- Every approval request gets a 48-hour clock, then escalates automatically. Approvals averaged 3.5 days before; they now average 9 hours.
- One supplier record per supplier, with the negotiated price list attached. If the price on an order does not match the list, it cannot be sent without a written reason.
- A monthly review of the top 20 suppliers by spend, checking three invoices each against the contract price. Twenty minutes of work, and it caught $180,000 of overbilling in six months.
The number that changed the conversation
Spend outside agreed contracts fell from 34 percent to 9 percent in five months. Overall purchase prices came down about 6 percent, which on $60 million is roughly $3.6 million a year — more than the company’s entire admin budget.
The finance director summed it up in one line: most of that money was not lost to bad suppliers, it was lost to good intentions and no visibility. The ERPNext Consulting work that mattered most was the boring part — writing down who could approve what.
Before your next leadership meeting, pull the last 90 days of purchases over $1,000 and check three of them against what you thought you were paying. That is your baseline, and it usually takes under an hour to gather.