Why Do We Have to Bother With Transactional Costs?
The true cost of a Purchase Order In today's business environment, transactional efficiency in procurement processes is crucial in maintaining smooth operations and optimizing costs. One of the most common aspects of procurement is processing purchase orders (POs). Whether running a small business or a large enterprise, understanding the cost per PO is essential for identifying inefficiencies and improving the transactional cost. In this post, we'll analyze the cost per PO processing for a European company with 1,000 employees and €1 billion in revenue. We'll consider labor, system costs, overheads, and approvals and detail each step involved. I used ChatGPT for these calculations, but the logic and reality checks were still human. After six rounds of review, we developed the proposed case, and it's likely a partial one. Please don't hesitate to expose gap coverage or give more realistic inputs. Company Overview For this analysis, the company: - Operate