The negotiation won 8%. The ledger shows 2%.

Negotiated savings and realised savings are different numbers, and the gap between them has a small number of predictable causes.

By Steve 4 min read
Abstract bridge artwork for The negotiation won 8%. The ledger shows 2%.

A supplier negotiation concludes well. The new rate card is 8% below the old one, the saving is written into the budget, and everyone moves on. Twelve months later, cost of sales per unit has fallen by something closer to 2%. Nobody lied. Nobody renegotiated. The money simply never arrived. This is one of the most reliably recoverable margins in a mid-sized business, precisely because it requires no new customers, no price rise and no difficult conversation. It requires only that the price you agreed and the price you pay…

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Important: General information only. Rialto Bridge articles describe patterns and considerations that may apply to a business; they are not financial, legal, tax or accounting advice, and they take no account of your particular circumstances. Consider your own situation and seek advice from a qualified professional before acting.

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