No cure, no pay
A success fee, based on shared savings. No cure, no pay. Our fee is a share of the savings your finance team verifies against a baseline it has signed. If there are none, there is no fee.
How the fee is structured
The fee is a share of verified savings. The share is a single digit to low double digit percentage, and it falls as the spend in scope rises: the bigger the programme, the smaller the share. We agree it in writing before any work starts, along with the categories in scope, the baseline, the carve outs and the measurement period.
The ceilings
The measurement period never runs longer than twelve months from the date each new agreement takes effect.
We invoice quarterly in arrears, and only against savings that have already appeared in your ledger.
We never invoice on projected or annualised savings, and never on signature.
The initial spend review carries no charge, and nothing else is chargeable at any stage.
The baseline in full
The baseline is your own paid prices and volumes over an agreed reference period, normally the previous twelve months, adjusted for known changes such as volume shifts, index clauses, scope changes and currency movement. Your finance team signs it in writing before work starts. If we cannot agree a baseline for a category, that category stays out of scope and we charge nothing on it.
What counts as a verified saving
- We build the baseline from your own paid prices and volumes over an agreed reference period, normally the previous twelve months.
- Your finance team signs the baseline in writing before any work starts. If we cannot agree one for a category, that category stays out of scope.
- A saving counts when the new terms are signed, in effect and traceable in your invoices or purchase ledger. Changes in volume and changes in scope do not count.
- Where a price is index linked or driven by a traded commodity, the baseline moves with the published index. We are paid on the improvement against that index, not on the movement of the market.
- If a category or a negotiation is already in progress when we start, we list it and carve it out at baseline sign off. If your own team delivers a saving on a category in scope without us, it is excluded on your written confirmation.
- Working capital gains such as extended payment terms, and one off rebates or credits, are reported separately. They stay out of the fee base unless you agree in writing that they belong in it, and never on the same basis as a recurring price reduction.
- Each saving is counted once, in AED, on what is realised within the measurement period and net of recoverable VAT. We do not charge on annualised or run rate figures.
Who verifies
Your finance team, always. We report the figure and they confirm it. If they do not recognise a figure, it is not a saving and we do not invoice it.
We take nothing from your suppliers
We take no commission, rebate or payment of any kind from any supplier. Your verified savings are our only income from the engagement. The people you buy from have no way to pay for our advice.
If you stop
There is no notice period, no minimum term and no exit charge. Stop before any savings have been verified and you owe nothing. Stop after new terms are signed and in effect, and the fee still runs on those specific agreements alone, invoiced quarterly in arrears against savings you have actually realised, and for no longer than twelve months from the date each agreement took effect.
This is how we normally work. The engagement letter governs each specific arrangement, and we are happy to work on your paper.