Paper prices rise steeply

We’ve just received an email from our stationery supplier notifying us that our contract price for 80gsm paper will be rising between 8%-12% from 1st October, with the prices of other stock going up by even more. This isn’t entirely unexpected, we’ve heard rumblings about the inevitability of sharp price rises all year, but it’s unwelcome nonetheless. The reason for the price hikes, apparently, is a set of unprecedented market conditions: a combination of decreasing volume year-on-year, challenging exchange rates, increased pulp prices and lower selling prices for cut paper across Europe compared with China and the USA mean mills are constricting  supply to Europe, pushing prices up. And it seems our suppliers expect the situation to continue until at least the end of this year.

The result, of course, for any business using paper – and I would guess that means pretty much any business of any size – will be a bigger stationery bill at the end of every month, unless they take steps to mitigate the higher prices. In the immediate short term, the quickest results would come from enouraging staff to value paper more highly – not easy when it’s been seen as such a cheap and disposable commodity for so long – by, for example, setting their printer to duplex (double-sided) printing as default, or by saving/filing their emails into folders for future reference rather than simply printing them out. And, of course, ensuring nobody feels they can take the odd ream home for their own use!

In the medium and long-term you should implement a thorough review of your paper purchasing policy. Are you with the right supplier? Could you use a cheaper brand? Could you buy in larger quantities? And so on. Of course, if you work with an Auditel cost, purchase and supplier management consultant to look after your stationery and business consumables overheads they will already carry out regular reviews and make recommendations to optimise your purchasing as an integral part of their ongoing management service. If not, and you’d like to,  contact your nearest Auditel consultant for more information about this issue.

Watch your back bills

Talking to a couple of our consultants this week it’s becoming clear that all the major energy companies are keen to claw in every penny they can in these hard times, which is why they have set up teams whose remit is to go back over business energy bills for up to 6 years. We’ve seen a number of cases in which these teams are generating new bills for old, and claiming tens of thousands of pounds from their business clients. The good news is that these bills are frequently wrong for a wide range of reasons so, if you know what you’re doing, you can get them reduced or even cancelled. At Auditel, of course, we do know what we’re doing and have good contacts and relationships with all the major energy suppliers so have had great results for our clients caught in this trap.

For example, one of our clients, the owner of luxury holiday home parks, received a £57,000 back bill for one site dating back to 2004, when they acquired it. A thorough investigation revealed a number of billing and administration errors which, when coupled with some tough face-to-face negotiation with the supplier,  brought the invoice down to £21,000, an overall reduction of 63%. Another, food distribution, client received a final bill for a site they had moved out of 15 months previously. The bill was demanding just over £32,000 based on the fact that the energy company had misread the meter for the 5 years our client was in the building. However, after much  time-consuming negotiation we were able to halve this demand.

Supplier credibility serves Auditel clients well

As cost, purchase and supplier management consultants it’s often assumed that our focus is just on saving money for our clients. Well, it is, of course. But the Auditel service is so much more.

For example, one of our manufacturing clients with a significant energy spend had been trying to move to a more effective rate with an alternative supplier but was being thwarted at every attempt by the stringent application of credit checking restrictions. In other words, supplier bureaucracy was forcing them to continue paying over the odds.

However, by leveraging the contacts and relationships we have built over 16 years as consultants in the energy industry we’ve been able to negotiate a manageable and affordable security deposit arrangement, enabling our client to benefit from both lower energy rates and improved service. I think that’s what you call a win win win situation!