Managing Cash Flow

Analyzing the Data 197
c. Can you provide a summary of vendors by commodity class?
Response: Yes
d. How often do you negotiate with vendors? Each purchase, monthly,
annually, other.
Response: By exception *
e. How many vendors make up approximately 80% of your total
purchases?
Response: 128 *
f. Do you use long term contracts or blanket purchase orders to lock in
price, quality, and on-time deliveries?
Response: Rarely *
g. Do you integrate purchases for production raw materials into your production
schedule?
Response: No *
h. Do you maintain vendor analysis statistics? Do they include?
– Total sales volume
– Total sales volume by item
– Quality data
– Merchandise return data
– On-time delivery data
– Other
Provide a sample report(s) of such statistics?
Response: No *
i. Are company individuals assigned contact responsibility for major
vendors?
Response: No *
j. How often are long-term purchase contracts re-negotiated?
Response: Rarely *
k. Do you have an ongoing process for identification of potential vendors?
Describe.
Response: No *
l. How many vendors have you added during the past year?
Response: 57 *
m. How many vendors have you deleted during the past year?
Response: 68*
Exhibit 6.5
Sample Cash Management Analysis Survey Form—the Accounts Payable
Function—Summary of Responses (continued)
about the function under review. The study team summarizes the data to identify
patterns of bad practices, operational deficiencies, cash management concerns,
and areas for further review. The accumulation and analysis of such user provided
data often becomes the starting point for further analysis. Thus, the analysis
form is a good tool to bring immediate focus to those areas to be considered in
cash management improvements.