How to verify savings on China import orders

Agree the baseline before negotiating

Save a dated baseline approved by purchasing and finance. Use the previous paid price for the same specification and comparable order terms where available. For a new product, agree a credible comparison basis and label savings against that basis explicitly. An inflated opening offer is weak evidence of a spending reduction. Use supplier quote comparison to check comparability. For advertised retail savings, see our guide to was-now discounts on imported stock.

Freeze the buying basket: product references, specification revisions, quantities and product mix. Record packaging, inspection scope, currency, delivery terms, payment terms and included charges. Compare the baseline and negotiated prices using that same basket. Keep this planned comparison separate from the savings actually delivered on purchases.

Give every saving a clear status

Use separate reporting categories rather than adding every negotiation result together. The Government Efficiency Framework says achieved savings should already have been realised. Apply that principle as a practical reporting discipline, and agree your own evidence gate with finance. Use factory negotiation guidance when agreeing the price and terms.

Trace the reduction through the transaction

Create a register linking each product line to the baseline document, negotiated quote, supplier acceptance, purchase order, goods acceptance record, final invoice and payment evidence. Record the price effective date and specification revision. Ask whoever claims the saving to identify the supporting documents, rather than submitting only a negotiation summary.

Match ordered, delivered, accepted, invoiced and paid quantities. Treat deposits and unpaid balances as pending. Check that the invoice applies the agreed unit price and that bank payments reconcile after fees and currency conversion. Resolve shortages, rejected goods and extra charges before closing the saving. Require evidence that any credit was refunded or applied to a paid invoice.

Calculate the net result without changing the basket

For each completed, comparable product line, subtract the final paid unit price from the baseline unit price and multiply by the accepted quantity covered by that payment. Include price increases as well as reductions when totalling the basket. Deduct additional costs incurred to obtain the saving. Apply the same allocation method to shared costs in both comparisons. For a logistics example, see our guide to evaluating port warehouse unloading savings.

Show negotiated product-price savings separately from exchange-rate movements, freight changes and changes in buying volume or product mix. Use a common currency basis to isolate negotiation, then reconcile to actual cash paid. A cheaper material or reduced inspection scope needs a separate comparison. Use budgeted versus actual landed costs to explain the wider spending difference.

Close the claim with finance

Give finance the fixed-basket comparison, transaction register and unresolved-items list. Record the reporting period, calculation method, exclusions and reviewer approval. Count a reduction only where its documents meet the agreed evidence gate. Keep future-volume projections separate, and prevent the same discount being claimed again as a rebate.

Leave conditional rebates pending until the conditions and settlement are evidenced. See annual volume rebates for agreeing those terms. With Cambridge China Bridge, ask the China staff to collect factory acknowledgements and specification confirmations, then match them to the order and invoice issued by your seller.