Five questions your finance director will ask before the new budget cycle

As organisations begin planning for the next financial year, finance directors are turning their attention to one of the largest controllable areas of expenditure: procurement.

For organisations that provide catering, food spend continues to be influenced by inflation, changing consumer demand and ongoing supply chain pressures. Against that backdrop, finance teams are looking for more than reassurance that costs are under control – they want evidence.

Increasingly, procurement and catering teams are being asked to justify spending decisions, demonstrate value for money and identify opportunities to improve efficiency without compromising quality.

Having access to reliable benchmarking data can make those conversations significantly easier.

Here are five questions finance directors are likely to ask ahead of the next budget cycle – and how benchmarking can help provide the answers.

1. Are we paying competitive prices?

This is often the first question.

Finance directors typically want confidence that the organisation isn’t consistently paying more than comparable businesses for the same products.

Without external market data, it’s difficult to know whether higher costs reflect market conditions or simply missed buying opportunities.

Benchmarking allows organisations to compare the prices they pay against similar organisations, identifying where they are performing well and where savings may be available. Rather than relying on assumptions, procurement teams can demonstrate whether pricing is genuinely competitive.

2. Are our suppliers delivering value for money?

Price is only one part of the equation – supplier performance is also important. Are suppliers providing consistent service? Are contracted prices being honoured? Are there opportunities to consolidate suppliers or renegotiate agreements?

Benchmarking provides an objective view of supplier performance by comparing pricing, product availability and purchasing patterns across a broad range of organisations. This enables procurement teams to have informed conversations with suppliers and ensure contracts continue to deliver value throughout their lifecycle.

3. Where are our biggest opportunities to save?

At every budget cycle, finance directors want procurement teams to identify realistic opportunities for savings rather than applying blanket cost reductions that could affect service quality.

Benchmarking helps pinpoint the categories where organisations are spending above market averages, highlighting areas where the greatest commercial opportunities exist. It allows procurement teams to prioritise their efforts where they will have the biggest financial impact, rather than chasing marginal gains.

4. Can we evidence good governance?

Good governance has become an increasingly important part of financial management.

Boards, auditors and senior leadership teams expect purchasing decisions to be transparent, evidence-based and capable of withstanding scrutiny.

Benchmarking provides independent, data-led evidence that procurement decisions are based on objective market intelligence rather than opinion. This strengthens business cases, supports procurement strategies and demonstrates that public or organisational funds are being managed responsibly.

5. How confident are we in next year’s budget assumptions?

Perhaps the most important question of all is whether next year’s budget has been built on realistic assumptions.

Budget forecasts based solely on historic spend can quickly become outdated, particularly in volatile markets.

Benchmarking provides a more informed view of current market conditions, allowing organisations to forecast future expenditure with greater confidence. It also helps finance and procurement teams model different scenarios, understand potential risks and make more informed budgeting decisions before the financial year begins.

Getting ready for your next budget cycle

Preparing for a new budget cycle shouldn’t be about defending historic spending. It should be about making informed decisions for the year ahead.

By combining internal purchasing data with external market intelligence, organisations gain a clearer understanding of where they sit in the market, where improvements can be made and how procurement can contribute to wider financial objectives.

As budget planning gathers pace this autumn, organisations that can back up their decisions with robust benchmarking data will be in a far stronger position to manage costs, demonstrate good governance and maximise value for every pound spent.

Whether you’re looking to benchmark supplier performance, identify savings opportunities or build a more robust budget, our team can help. Get in touch with our team here to find out how benchmarking can support your organisation’s budgeting and procurement strategy.

The Quenelles team