Small business owners often judge purchasing performance by how much they save on supplies and equipment. But the lowest price does not always tell the full story. Time spent processing orders, employees purchasing outside approved channels, and inefficient buying practices can also affect a company’s bottom line.

Amazon Business has introduced Value Intelligence, a new reporting experience designed to help organizations measure the broader financial and operational impact of their purchasing strategies. The tool brings cost savings, operational efficiency, and purchasing compliance into a single view, giving businesses a more comprehensive picture of procurement performance.

Available through Amazon Business Analytics for eligible customers, Value Intelligence uses an organization’s purchasing data alongside independent third-party benchmarks. Amazon says the system provides transparent calculations that customers can review and adjust, helping businesses better understand how their purchasing decisions affect costs and productivity.

“Procurement has always been about more than price, but price is what gets reported because it’s the easiest thing to measure,” said Shelley Salomon, worldwide vice president of Amazon Business. “We designed Value Intelligence to change the conversation from ‘what did this cost?’ to ‘what value is procurement creating?’ Now leaders can see the savings, time back, and off-policy spend prevented in one view, and confidently show the full impact of their buying strategy, not just the price.”

Measuring More Than Purchase Prices

Traditional procurement reporting often emphasizes discounts and negotiated prices. However, businesses can lose some of those benefits through inefficient purchasing processes, fragmented ordering systems, and purchases that bypass established policies.

Amazon Business Value Intelligence addresses these issues by organizing purchasing performance into three categories:

• Cost Savings: The system calculates savings using an organization’s actual order data at the individual product level. It compares purchase prices against validated reference prices, incorporating savings from pricing programs and discounts. This gives businesses a consolidated view of purchasing savings that might otherwise require manual reporting.
• Operational Efficiency: Value Intelligence estimates the operational benefits associated with purchasing activities. Using Amazon Business transaction data and adjustable assumptions, the tool helps organizations quantify efficiency improvements that can be difficult to measure through traditional financial reports.
• Purchase Compliance: The platform provides information about purchasing-policy adherence, helping organizations evaluate whether employees follow established buying procedures. Greater visibility into compliance can help businesses identify purchasing practices that may undermine negotiated savings or internal controls.

Amazon says the calculations include information about their underlying methods and sources. The company positions this transparency as a way for purchasing managers and financial decision-makers to evaluate the results rather than relying on estimates without supporting data.

What Small Businesses Could Gain

Although larger organizations typically maintain dedicated procurement departments, smaller companies face many of the same purchasing challenges, often with fewer resources to manage them.

For example, a growing business with multiple employees ordering office supplies, technology accessories, and operational equipment may struggle to determine whether its purchasing policies actually save money.

Value Intelligence could help an eligible business examine the discounts it receives, estimate efficiency gains from its purchasing processes, and assess compliance with established buying guidelines.

These insights could prove useful when reviewing operating expenses, establishing purchasing budgets, or deciding whether to consolidate more business purchases through Amazon Business.

The operational efficiency component may be particularly relevant to small businesses where owners, office managers, or administrative employees handle purchasing alongside other responsibilities. Reducing repetitive administrative work could free employees to focus on customer service, sales, or other business activities.

The compliance information could also benefit businesses experiencing growth. As companies add employees and locations, purchasing decisions can become harder to monitor. Better reporting may help managers identify where employees are following approved procedures and where additional oversight is needed.

Questions Businesses Should Consider

While consolidating purchasing information could simplify reporting, small business owners should understand the limitations before relying on the platform to evaluate their overall procurement performance.

Value Intelligence draws on Amazon Business purchasing activity. Companies that purchase significant quantities of goods through other suppliers would still need to account for those transactions separately to develop a complete picture of their spending.

Businesses should also examine the assumptions used to calculate operational efficiency. Estimated time savings do not necessarily translate directly into reduced expenses or additional revenue. The ability to review and adjust those assumptions could help companies develop more realistic evaluations.

Amazon says the platform uses independent third-party research to benchmark its calculations. However, the announcement does not identify the research providers or provide detailed examples of how the benchmarks are applied.

The company also has not specified detailed eligibility requirements or whether additional charges apply. Interested businesses would need to contact their Amazon Business account teams for more information.

Value Intelligence is available now to eligible customers through Amazon Business Analytics. For small businesses already using Amazon Business, the new reporting capabilities offer an opportunity to evaluate purchasing performance beyond discounts and product prices. The practical value will depend on purchasing volume, the accuracy of underlying assumptions, and whether the insights help owners make better spending decisions.

This article, “Amazon Business Launches Tool to Track Purchasing Savings and Efficiency” was first published on Small Business Trends