The client was a locally operating company based in Northern Italy, structured as a standard Italian S.r.l. (società a responsabilità limitata), with a team of total nine employees. It operates within the local services industry, focusing primarily on maintenance and installation. Despite having very stable operations, the company was facing a challenge with operational costs, yet there never was structured system in place to monitor or control procurement – related spending. This lack of visibility and control over purchasing processes was directly impacting profitability.
The initial challenge
While already collaborating with this client on a different project, the founder brought up a concern that something was clearly eroding profitability and no one could pinpoint what.
At first glance, the business looked healthy with consistent client base, a reliable volume of work year after year, and solid monthly revenue.
As we dug deeper, it became clear there was no structured procurement system in place, just a series of informal workarounds.
Purchasing was reactive and fragmented:
– Field technicians bought materials as needed, often in a rush
– Office staff occasionally stepped in to cover gaps
– The founder personally supervised the “larger” orders – without benchmarking prices or tracking trends
What looked like day to day flexibility was actually uncontrolled spending hidden in plain sight that was slowly eating profitability.
Phase 1: Ground level check (weeks 1 – 4)
Accounting Analysis
We worked directly with their external accountant to pull all procurement related entries from the last fiscal year. All were recorded, yes but not categorized usefully. Everything from toner to tiles was mostly just under “Materiali.”
We spent the first two weeks:
- We began by going line by line through historical invoices categorized under material expenses in their accounting records. It was mostly manual process, but necessary because there was no centralized log of what was purchased, by whom, or why. Each entry had to be “decoded”: supplier names, item types, quantities, and pricing. But this forensic review was essential and gave us the first clear picture of actual procurement behavior
- Matching bank statements with orders
- Manually reclassifying purchases into meaningful categories: recurring vs. one – time, operational vs. project – based, core vs. auxiliary
Balance sheet insights
We also reviewed inventory turnover and noticed:
- Overbuying on some fast moving items
- Understocking other items which often lead to urgent, overpriced purchases
- Medium month to month oscillations in cash flow directly tied to chaotic buying
Team interviews
We spoke with:
- The office assistant (who did occasional ordering)
- Field technicians (who often bought directly)
- The founder (who supervised all bigger expenses)
Key insight: Everyone in the company had the ability to make purchases, but no one truly owned the procurement process. In a fast paced service environment like theirs, a certain level of flexibility is essential – field technicians need to respond quickly, and delays can cost business. But flexibility without structure becomes a liability. Without defined roles, purchasing limits, or approval flows, there was no mechanism to control pricing, avoid redundancy, or track overall spending. What they needed wasn’t rigid bureaucracy – but a SMART web lightweight framework that could preserve agility while bringing visibility and control to procurement.
Phase 2: mapping and diagnosis (weeks 5 – 7)
We reconstructed a full year of procurement data and visualized:
- Supplier frequency
- Delivery cost impact
- Order sizes and timing
- Repetition and fragmentation
We discovered:
- 11 active suppliers, 4 of which provided almost identical materials
- Over 20% of spending was made in small, last – minute purchases
- At least 2.000,00 EUR / year in express delivery fees and unnecessary stock
We also calculated that procurement made up ~ 44% of total annual company expenses and yet had zero process or planning behind it.
Phase 3: system building & negotiation (weeks 8 – 12)
Internal procurement system
We started with the simplest possible tool – a shared Google Sheet. It had three structured tabs – Needs, Planned Orders, and Confirmed Deliveries. The goal was to create just enough visibility to track requests, consolidate purchases, and avoid redundancy. We also introduced basic forecasting: by aligning procurement with the known project pipeline and predictions, the team began to anticipate material needs 2 – 4 weeks in advance instead of reacting last minute.
As the system matured, we outgrew the spreadsheet and eventually, we developed a lightweight internal web/mobile app tailored to their process – maintaining the same proven structure but with better usability, searchability, and audit trail. It remained intentionally simple, yet dramatically improved procurement discipline and internal communication.
Supplier consolidation + renegotiation
We cut from 11 suppliers down to 6.
Negotiated better terms with 3 key ones including:
- Volume based discounts (5 – 14% based on the items)
- Longer payment terms with some suppliers
- Greatly reduced or eliminated delivery fees for planned orders
The struggles and realities in the process
Staff resistance
At first, the technicians pushed back against the new system because they believed it will slow them down. Their concern was valid, in a field based business, speed matters.
To address this, we introduced a hybrid solution. Short weekly syncs with the office ensured their needs were heard and planned for in advance, reducing friction. For genuinely urgent situations, we implemented a fast – track purchase option, but with clearly defined limits, suppliers and accountability. This gave technicians the agility they needed without compromising overall cost control.
Founder habits
The founder was initially skeptical and reluctant to hand over control of purchasing decisions and his proven business strategy. For years, he had managed supplier calls, negotiated prices on the fly, and handled urgent orders personally. It felt like delegation would introduce more risk. It took multiple conversations, real world examples, and scenario modeling to shift that mindset.
Time investment
This wasn’t a quick fix – it took a full three months of deep work: collecting and cleaning fragmented data, aligning team habits, clarifying roles, and iterating the system until it actually worked in the real world not just in theory and our models. There were moments of resistance, setbacks, and adjustments along the way.
But once the pieces locked into place, the impact was undeniable and positive. Purchasing became intentional, predictable, and far more cost efficient. What started as a messy, informal process was now a streamlined system supporting the company’s growth instead of silently draining its margins.
Final results: comparing real data from 2023, 2024, and early 2025 – first and second quarter
When we compared procurement related expenses across 2023, 2024, and the first two quarter of 2025, the shift was evident. In 2023, material, tool, and equipment costs had steadily climbed with no clear trend or control. By the end of 2024, after implementing the new procurement system, we recorded a confirmed reduction of approximately 20.000,00 EUR in annual spending, despite a similar project volume. This translated to around 17% savings relative to their previous expense baseline. The first two quarters of 2025 continued this positive trend, showing even greater consistency in spending, tighter cost control, and early signs that the savings would surpass the previous year’s results if the pace held.
But the impact wasn’t only financial: supplier relationships improved thanks to more consistent ordering and increase in order volume and clearer communication. Technicians experienced fewer delays and shortages, making field operations more predictable.
And perhaps most telling – saw a clear improvement in overall profitability. With the increased margin, he chose to reinvest part of the savings into salary increases for team members, strengthening retention and morale while reinforcing the impact of operational discipline.
Strategic lessons
You don’t need ERP software to act strategically
An only shared spreadsheet, if used well, can outperform chaos with tools.
Procurement is invisible – until it becomes a leak
Most businesses only notice it when margins collapse.
Accounting data isn’t just for taxes
It’s a business intelligence asset, if you know what to look for.
If buying is everyone’s job, no one is optimizing
Ownership, even in small teams, creates savings and accountability.
If you’re running a small business and no one can answer, “Where exactly is our money going?” – start with procurement. That’s often where the quietest leaks live.
