BY GEOFF BACINO
While your credit union is taking stock of your priorities and costs this New Year, you should also be conducting a review of your vendor contracts. Answering these five questions will ensure your CU is receiving the most product and vendor bang for its buck.
As credit unions continue the budget and planning season, there should be an evaluation of priorities and costs.It is also the time to review vendor contracts.Too often, credit unions just plug last year’s costs into budgets and forecasts without evaluating whether these costs are the best deal for them.A smart institution can find a number of opportunities to reduce product and vendor costs by simply asking the right questions.
These are the five questions every credit union should ask during budget season.
- Is the credit union getting the best deal in the market?Perhaps the contract was competitive when it was signed; maybe it wasn’t.Regardless, things most likely have changed in the marketplace since the deal was originated.Increased competition, economies of scale and technological advances may have pushed down costs.Or maybe the automatic price increases that were agreed to years ago have resulted in the credit union overpaying.By reviewing current vendor pricing, comparison shopping or utilizing third-party benchmark data, the credit union should be able to save money.