Recurring vs one-time savings: in-year impact and run-rate
Phasing a procurement saving over time
By Alexandre Lio, founder of The Procurementor, ex-Amazon EMEA and ex-Cellnex
Last updated:
A recurring saving repeats every month; a one-time saving happens once. In-year impact measures what the saving delivers in the current financial year, run-rate what it would deliver over twelve full months: only the first belongs in this year's budget.
Two different questions, then: how much does this saving weigh this year, and how much will it weigh over a full year? Confusing them promises the budget an impact that only arrives next year.
One-time or recurring
- One-time saving: it happens once. A year-end rebate, a capital purchase negotiated better, a credit note won in a dispute.
- Recurring saving: it repeats every period. A lower unit price on a multi-year contract, a renegotiated subscription.
In-year impact or run-rate
- In-year impact: what the saving really delivers in the financial year, from its effective date. This is the budget figure.
- Full-year run-rate: the monthly amount multiplied by twelve. This is the cruising-speed figure, useful to compare initiatives and to prepare next year's budget.
In-year impact = monthly saving × number of months of the financial year from the effective date.
Worked example: two lines, four numbers
Line A: a recurring saving of €5,000 a month, effective 1 September 2026 and recognised over twelve months. Line B: a one-time rebate of €18,000, obtained in November 2026.
| Line A, recurring | Line B, one-time | |
|---|---|---|
| In-year impact 2026 | €20,000 (4 months) | €18,000 |
| In-year impact 2027 | €40,000 (8 months) | €0 |
| Full-year run-rate | €60,000 | None |
| Total value recognised | €60,000 | €18,000 |
The figure to announce for 2026 is €38,000: €20,000 plus €18,000. Presenting €78,000, the run-rate of line A plus the rebate, oversells the year by €40,000. That gap resurfaces at year-end, when finance reconciles savings with the P&L.
Three common mistakes
- Annualising a one-time saving. An €18,000 rebate is not worth €18,000 a year.
- Presenting run-rate as the year's result. It only is for a saving effective on 1 January.
- Dating the saving at signature. A contract signed in June and effective in October delivers three months of impact.
And after twelve months?
A recurring saving is not counted forever. After the first full year, the negotiated price has become the new baseline: continuing to claim it would count the same gain twice. In the example, line A is recognised from September 2026 to August 2027, then it stops. The next saving on that contract will be measured against the 2026 price, not the one before.
In the tool, the recognition horizon is twelve months by default and can be set line by line, for an eighteen-month contract for example.
Which figure for which purpose
| Purpose | Figure to present | Why |
|---|---|---|
| This year's budget | In-year impact | It is what really reduces the year's spend |
| Next year's budget | Next year's in-year impact, and run-rate | The remaining months of a saving already signed are secured |
| Executive committee | Both, named | Run-rate shows the pace, in-year impact the result |
Why it matters
The budget is built on in-year impact, the mid-term plan on run-rate. A procurement team that gives a single number forces finance to guess which one it is, and finance then keeps the more cautious reading. Giving both, correctly named, avoids that discount. It is also one of the checks in finance validation: since when, and for how many months of the financial year.
How the tool enforces it
Every line carries a cadence, one-time or recurring, and an effective date. The tool calculates in-year impact, counting only the months that fall inside the calendar year, and full-year run-rate separately. A one-time line is recognised once and has no run-rate. The forecast spreads the impact month by month. It is the third of the five rules of the procurement savings methodology.
Frequently asked questions
What is the run-rate of a procurement saving?
It is the monthly saving of a recurring line multiplied by twelve: what it delivers over a full year, once at cruising speed.
How do you calculate in-year savings?
Multiply the monthly saving by the number of months of the financial year from the effective date. A saving of €5,000 a month effective 1 September delivers €20,000 in the year.
Does a one-time saving have a run-rate?
No. It is recognised once, in the year it happens, and is never annualised.
Which figure goes to the budget?
In-year impact. Run-rate is shown next to it, to prepare the following year, never in its place.