Internet purchasing cuts administration costs

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More than a third of Britain’s small- and medium-sized (SME) businesses (up to 250 employees) are using the Internet to purchase goods or services, according to a study commissioned by Internet-based small business information resource The study identified IT hardware and software, travel and insurance as the goods most likely to be purchased online by SMEs.

Adopting the technology means businesses do not have to waste time manually tracking the progress of each order. With fewer manual interventions, many SMEs will enjoy a reduction in transaction errors, allowing companies to cut administration costs.

According to, savings achieved in this way go straight to the bottom line – a 5% reduction in costs can, in some cases, result in a 50% increase in profit margin.

To obtain an equivalent impact by any other route, a company might have to increase sales by 50%.

SMEs, says, can implement an e-procurement system several ways including mapping out current procurement processes, and approaching suppliers to find out who will trade with them electronically.

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