Cost Savings

Home Blog Job Board Community Contribute Vendor Listings Search Site

Cost savings.

Whenever 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 Maintenance Contracts

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 budget.

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 copier.

Office Supplies

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 supplies ordered.
Scratch pads can be put together from re-cycled paper.
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 inventories.
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 Cartridges

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 report.

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.

Professional Development

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 charge.

Technology Spending

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 Charges

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.

Other Categories

Some other categories are travel and entertainment, publications and events.

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.