you review budgets and financial statement, there are always areas where
purchases are aggregated into general categories and nobody seems to know
what makes them up.
They're items that are sometimes not easy to audit so they may tend to be
overlooked compared to some of the more obvious items such as salaries,
travel, publications, events etc.
There are also expenses that occur on a regular basis, where we tend to
automatically pay, without doing an analysis of the benefits.
You don't necessarily have to take a hard line on all of budget areas, but
with a comprehensive review you can often realize savings and re-direct
these funds to more important priorities.
Computer and Office Equipment
Evaluate whether these are needed. Most equipment is durable, and if it is
going to break, will typically do so during a warranty period. In some
cases, the cost of the maintenance contract over a 3-5 year period will
actually come close to a substantial portion of the purchase price of the
new piece of equipment.
Computers and servers have easy to replace component parts. If you have an
adept technical staff, cancel your maintenance contracts. You can transfer
what you're spending on the contracts into your computer replacement
Photocopy vendors make most of their money on the lease and per copy
charges. In some cases, depending on volume and the per copy maintenance
price, you may be better off to purchase a copier rather then
leasing. Do a net present value analysis over the estimated life of the
Office supplies are usually a large budget line item. Just about
everything is included here, and at the end of the year, we all wonder
what we spent and why the total is so high.
- Have a central supplies cabinet that
staff need to check before ordering.
- If you can, centralize all ordering with
one person. Even better to standardize ordering through an on-line web
form so orders can be tracked and easily forwarded to vendors.
- Standardize with one vendor and
negotiate volume discounts.
- Keep an overall inventory of some of the
more expensive items and review on a regular basis.
- Try and set standards for the types of
- Scratch pads can be put together from
- We have the tendency to hoard.
Periodically have staff go through their desks and return those boxes of
pens, stacks of post it pads and other items that create secondary
- Don't allow mass purchasing at budget
year end if you have carry forward.
- When someone leaves, return their
supplies to the general cabinet.
- Recycle items such as file folders.
Everyone wants new ones.
- Reduce paper and photocopying costs by
archiving reports on a web site. Investigate electronic imaging.
- We tend to order stationary to take
advantage of quantity breaks and can end up with a lot of obsolete
stationary as a result. Evaluate carefully whether the quantity breaks
are worth it, particularly if stationary changes regularly.
- We always tend to stay with the same
coffee and similar vendors. You may be able to save by purchasing these
types of supplies directly through one of the discount wholesalers.
Printers, Toner and Ink Jet
Color printers are useful, but staff need to be aware of the high cost and
that they shouldn't be using for printing web site pages or that 100 page
Laser printers have a per copy cost less than ink jet printers so when
purchasing printers try and estimate the volume and per-copy cost to make
the decision regarding a printer.
Train staff on how to use draft modes when printing.
Is professional development managed as a perk, or is there an overall plan
in place for each staff member, and are these plans monitored?
Conferences and trips are expensive, and one alternative is to bring in an
expert for a day. Many colleagues will also be willing to do this at no
A substantial category in all budgets.
- Is there a systematic and organized
computer replacement plan or is it ad-hoc based on left over funds at
the end of the budget cycle?
- Does the computer replacement plan
consider the type of user and the nature of their work?
- Are institutional volume discounts being
taken advantage of in software and hardware purchases?
- Are the correct number of software
licenses being purchased?
- When a new computer is ordered are
licenses for software transferred from and older machine or new ones
purchased since that's what comes from the vendor?
- Are central services being taken
advantage of or are these services duplicated within the department.
- How is the training budget allocated and
is advantage being taken of central training opportunities?
Telephone and Communication
It's difficult to remove the ability for staff to make long distance
calls, but this is one area that can be subject to abuse if not monitored
at least on an occasional basis.
Phone logs are voluminous but should be subject to at least periodic audit
and spot checking. There should be a policy on long distance usage that
states clearly when staff are required to reimburse for personal calls.
Tied in with telephone charges are overall communications charges for cell
phones, hand held devices and Internet access by staff on the road.
Calling plans should be reviewed on an annual basis and alternatives
evaluated. Staff should be told to use cell phones for making long
distance calls in hotel rooms as it is usually substantially cheaper.
The cost for Internet access by staff on the road can be reduced by
purchasing an office membership with an ISP that everyone can use, so
staff on the road can access the Internet using local numbers. This is
considerably cheaper than having staff dial up to the office server.
Some other categories are travel and entertainment, publications and
The policies on these items should be reviewed on an annual basis, and
measures of effectiveness put in place.
For example, how many trips were taken, what was the average cost of a
trip, and how many calls took place on a trip?
In all cases, implementation of standards and good advance planning
processes helps to define the appropriate levels of expenses more clearly
so that maximum advantage can be taken of limited budgets.