School’s out, smart spending is in: tips for fiscal year end planning
As the school year winds down, students and teachers begin to look forward to the summer, when they can enjoy some much-needed down time. But for many administrators, the end of the school year is a critical time for budget planning.
Each summer, many school boards come together to finalize and approve budgets for the upcoming school year. According to the Education Data Initiative, public K-12 schools spend a total of $666.9 billion annually, averaging $13,185 per student. In higher education, this number more than doubles: the EDI found that public colleges and universities spend an average of $28,976 per student.
While budget sizes may vary, school administrators across the country must meticulously plan every dollar of funding, from faculty salaries to dry-erase markers. So where should you begin?
1. Review the previous year's budget
The first step in planning next year’s expenditures is understanding how accurate your current budget is. Are there large gaps between your predicted and actual expenditures? Perhaps you underestimated your inventory, leaving large amounts of classroom supplies sitting around and gathering dust.
Getting a bird's eye view of how your organization is spending is crucial to this review process. Available to Business Prime members, Spend Visibility's cloud-based system allows you to analyze your spending with data visualizations that can help you make smart budgeting decisions, easily locate compliance issues, and find opportunities to save in the future.
2. Create goals
After reviewing historical spending, it’s time to review your priorities for the next school year. These can be influenced by trends in enrollment, social responsibility goals, and macroeconomic factors such as inflation.
According to the National Center for Education Statistics, public schools typically receive between 30-50% of their funding from local property taxes. While inflation rates can vary from day to day, property tax rates are adjusted annually, which means school revenues may lag behind. Getting a full picture of what you’ll be spending your money on is crucial for combatting challenging economic conditions.
What are the big ticket items your district or institution should plan for? Perhaps your IT department is gearing up for a device refresh, or you’re preparing for campus improvements. For single-SKU, high volume purchases, Amazon Business’ Request for Quote tool allows your team to sit back while we find pre-vetted bulk suppliers to provide competitively priced quotes.
“There is a whole operation behind the scenes that helps support what goes on in the classroom. The more efficient we can be as a back office operation, the more money can go toward the classroom.”
— Chris Passarge, Chief Operating Officer for Lakota Local Schools
3. Have the right technology in place
Technology is constantly evolving and improving, which means solutions can become outdated in a matter of months or years. According to Forbes, outdated technology can hinder your organization more than you may think. Says Forbes contributor Chris Cancialosi, “Outdated tech, or cobbled together solutions, limits your ability to respond to the needs of your organization and to changes in the market.”
In a 2023 Worldwide Business Research survey of procurement, supply chain, and risk management leaders, 49% of respondents said “manual data entry is one of the top-three biggest challenges they face in evaluating supplier business practices. Other top barriers include poor or incomplete data (46%), data enrichment (42%), and efforts relating to digital transformation (39%).”
With change management posing a challenge for many procurement officers, it’s best not to wait until mid-school year to begin the transition to a new system. If you’re thinking about implementing a new piece of technology, such as Punchout integration or Single Sign On (SSO), now is the time to get started.
4. Find the right vendors
Of course, pricing is just one element to consider when planning your procurement budget. According to a survey by the National Association of Education Procurement (NAEP), over 58% of procurement offices are also responsible for supplier diversity. Many schools also have specific goals for purchasing locally-sourced products and products with sustainability certifications.
Sourcing vendors with these criteria can often be a headache for administrators and staff. Included with Business Prime, Guided Buying is an Amazon Business feature that can encourage purchases aligned with your Environmental, Social, and Governance (ESG) goals by turning procurement policies into easy-to-follow visual signposts for buyers.
Budget planning and approvals can be a cumbersome process; however, by following these guidelines, you can help alleviate bottlenecks and set your organization up for success in the following school year.
Amazon Business combines procurement expertise with curated solutions to help organizations define, meet, and measure their goals when planning for fiscal year end.
