Schools are facing some of the steepest cuts since the 1970s. So, we’re guessing that seeing your school’s bank balance going down rapidly as the school year progresses is getting incredibly scary! But what about the granular detail – is that visible? We’re talking about knowing who is buying what, when, how often, where from, & why.
Purchase to pay software, along with detailed analytics, allows you to drill down by location (think MATs (Multi-Academy Trusts)), department, or any spend category. This provides that granular detail that supports total spend visibility.
The importance of spend visibility
Spending visibility allows school administrators, leaders, heads, & governors to see how & where a school’s money is being spent. Visibility is crucial for:
- tracking departmental spending
- overall budget tracking
- tracking trends & making financial forecasts
- making plans for future budgeting & spending
- identifying opportunities to make significant savings
Breaking down school spending
A breakdown – or analysis – of school spending is key to fully understanding where money is going &, essentially, where savings can be made.
A good spend analysis program will identify areas to specifically focus on:
Spend analysis of categories or departments
Identifying categories where spending is particularly high can indicate areas where a school is paying too much for a product or service. This could be admin costs, such as energy or network providers, or it might be the drama department’s props & costumes.
Spend analysis of suppliers
An incredibly useful insight into spending involves establishing why suppliers have been used. Ask those who make purchases why they have used certain suppliers Is it because of convenience, price, or quality? If more than one supplier within a category has been used, it might mean that the school is missing out on potential discounts for larger orders.
Spend analysis of those making purchases
Certain members of staff within your setting are likely to be skilled in purchasing. They may also have more time to devote to making the best purchases. However, when those with no experience, no notion of the bigger picture or no time to put into researching deals are left to make spending decisions, saving opportunities are often missed. When purchases are made by non-purchasing professionals it’s likely the prices being paid will be higher. So significant savings can be made when this is addressed.
Analysis of when money is being spent
Purchasing professionals are aware that prices drop when suppliers are eager for business, which offers opportunities to reduce costs. Schools can consider whether there are optimum times in the school year to make certain purchases & plan accordingly, rather than spending on a more as-&-when-needed basis. It’s also worth noting where prices are increasing year after year as price creep will also impact the school’s budget.
How & where schools can make savings
It is only with spend visibility & analysis of the areas mentioned above that useful conclusions can be made. From these conclusions come recommendations & actions that will really impact the school budget going forward.
Key recommendations are:
- Review larger contracts at least annually.
- Consult the government’s Schools Financial Benchmarking site to view your school or academy trust's financial data, see how it compares with others & use the information to establish relationships with other schools or multi-academy trusts.
- Go digital where possible, cutting down on paper & printing costs, both in & out of the classroom.
- Plan ahead & make purchases at the most cost-effective times.
- Assign spending responsibilities to more experienced members of staff & provide information & training on spending where possible.
- Merge orders, when possible, to save on delivery costs & to optimize discount opportunities.
- Invest in a purchase to pay (P2P) system to support school spend visibility - by using advanced digital procurement applications & technologies, it becomes very easy to immediately identify how much your school could save by paying less.