Pictured above: Neil Philpott, regional private and family business expert at PricewaterhouseCoopers

Private and family businesses in the West Midlands should be looking to maximise value from their supplier relationships by undertaking critical reviews of contracts with suppliers now rather than waiting until the economic recovery is more firmly established, according to experts at PricewaterhouseCoopers LLP (PwC).

Data suggests that many private and family businesses in the region, particularly those who outsource operations or who operate complex or long term supply arrangements, are paying over the odds.  Reasons include inappropriate or outdated contractual terms, or the lack of a detailed understanding of the practical implications of the contracts.

Those that decide to take action now stand to make the most substantial savings, according to Neil Philpott, regional private and family business expert at PricewaterhouseCoopers. He says:

"Given some of the conflicting messages on the strength of the economic recovery and uncertainty about public sector spending cuts, businesses could be forgiven for sitting tight with their existing suppliers and concentrating on other opportunities for cash management until the recovery is in full swing.

"However significant gains could be achieved by renegotiating supplier contracts now and such matters can easily be overlooked once the economy is more buoyant and attentions turn to satisfying orders and customer demands."

PwC estimates that, based on the recent achievements of its Commercial Assurance team, savings of between 2 and 15% of costs can be achieved, with the values increasing in line with the complexity of the arrangements.

Neil Philpott concludes: "It may not seem like a major priority at present but now is precisely the time that businesses should be preparing for growth by getting their supplier contracts in order."