Buying groups and procurement consultants: turn measured savings into justified success fees

01

The problem starts before the invoice

Savings announced after negotiation are not yet realized member savings. Volumes, rebates, fees and mandate terms can change expected compensation. Buying groups and consultants need evidence connecting action, validated benefit and the agreed remuneration rule.

The question is not simply where to buy more cheaply. It is which information must come together before deciding, who can confirm the requirement and how to check the outcome after purchasing. Start with a manageable scope, retrieve existing records and make discrepancies discussable with the people who understand operations.

02

An application to develop with Kelqio

Connect baselines, orders and invoices, then apply mandate thresholds, rates and caps. Distinguish identified, realized and collected benefits for each case.

The approach connects supplier information, catalogues, requests and orders. Each proposal should retain original references, the effective date of the terms used and the decision owner. Buyers can accept a suggestion, correct it or explain why it does not apply. That response becomes useful information for the next transaction.

Savings and success fees

Distinguish observed savings, implementation costs and the fee calculation base.

What the monitoring could look like

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Savings and success fees

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03

What makes a comparison useful

Networks need to identify the entities and transactions covered by each agreement. Terms may depend on time periods, supplier scope or volume levels. Returns and credits can alter the eligible base. Without explicit eligibility rules, savings reports may add amounts not available to every member.

Share the remuneration method with customers before presenting the final result. Retain the baseline, rate, thresholds, exclusions and measurement period in the case file. Once benefits are approved, fees follow from that rule. Kelqio can provide this tracking as software separate from a consultant’s or buying group’s own fees.

04

Bring the right data together

Mandates, agreed baselines, orders, invoices, rebates, credits and approved fee rules.

First, check a few lines from end to end. Do references match across sources? Do amounts use the same unit and period? Are terms still valid? File imports can support this initial review. More automated connections follow once matching is understood and responsibilities are assigned.

Data freshness needs to stay visible. Old stock records, expired rate cards or unapproved documents can make a proposal unusable. Signal missing information and retain the last reliable state rather than presenting an apparently precise calculation based on incompatible inputs.

05

An example to explain the calculation

In a fictional case, €80,000 of net realized savings are approved against the agreed baseline. The mandate charges 12% on that base, capped at €15,000. The fee is €9,600, below the cap. This rate illustrates the mechanism; it is not Kelqio pricing.

Savings that remain forecasts or depend on volumes not yet purchased stay outside the realized base. The customer should be able to trace the €9,600 back to eligible transactions and mandate clauses, then distinguish the fee invoice from its collection.

06

Measure what actually changed

Validated realized savings and documented success fees.

Agree the baseline before claiming a benefit. Define scope, eligible volumes, quality, time period and costs required to change the situation. An identified opportunity, an approved decision, an order and an invoiced result are separate steps. Tracking them independently prevents an estimate from becoming a promise.

Cash released from lower inventory and staff time saved create value, but are not automatically recurring cash savings of the same amount. If outcome-based fees are appropriate, agree their calculation base. Subscriptions or fixed fees may better suit risk prevention and avoided costs that are difficult to verify.

07

Conditions for a useful result

Do not count one benefit both as a rebate and a net-price reduction. Agree methods and exclusions before calculating fees.

Approval should match the consequence of the decision. A different pack size does not require the same review as a new critical reference. Teams need access to the explanation, documents and person who accepted the change. This traceability also supports disputes and rule corrections without removing history.

08

Start with a real case

Choose a category, site or contract where the problem can be observed. Gather sample orders, applicable terms and available outcome evidence. The first exercise should cover the whole chain: data, proposal, approval, action and measurement.

Then compare processing time, matching quality and verifiable results. Errors and rejected proposals matter as much as gains: they reveal missing information or constraints. Expand once owners have a method they understand and can use routinely.