As prices rise, getting value for money is key for the education sector says Soldo

In August 2022, UK inflation reached 10.1%, with increases to fuel, energy, and food prices key contributing factors. (https://www.theguardian.com/business/live/2022/aug/17/higher-food-energy...) With experts predicting continued price rises into 2023, Soldo surveyed 250 education-sector professionals to understand how they are currently managing expenses and spending.

Soldo’s survey results revealed that departments across schools, colleges, and universities are all spending on a regular basis. 63% of those they surveyed made purchases and processed financial paperwork at least a few times a month. And the areas they are spending in are likely to be impacted by any future price rises. 42% spent on travel and entertaining, 30% on managing facilities, and 28% on catering. And 71% of those they spoke to managed monthly departmental budgets over £500, which means that any overspending or savings would have a big impact on overall institution budgets.
 
With inflation at front of mind for many, universities are already seeing more scrutiny over their spending from students, parents and trustees who are all keen to see value for money. And vice-chancellors have warned that they could be forced to increase class sizes, reduce staff numbers, and cut UK student numbers, if the real value of tuition fees falls further. (https://www.theguardian.com/education/2022/jun/29/uk-universities-warn-t...). While in schools, pupil meals, rising heats bills, transportation costs, and increasingly expensive books and stationery are all a worry for leaders. As the government asks schools to find another £1 billion, it’s essential that schools and universities take control of their non-staffing spending and identify possible savings.

That’s why Soldo are recommending schools consider automating their expense and spending processes. Only 28% of those surveyed, and only a third of the headteachers, currently use a spend or expense management platform. This means teachers and administrators are using a variety of different manual processes, often in one institution. 56%, for example, are paying expenses out of pocket, while 40% are using petty cash.

Soldo advise that relying on manual processes like credit cards, reimbursements and petty cash adds unnecessary admin and wastes time. Concerningly, as we face continued rising prices, they also don’t give finance teams full visibility of what’s being spent, or where savings can be made. Using petty cash, for example, leaves many small purchases unaccounted for. While asking employees to pay out of pocket and then sort reimbursements can result in unplanned purchases and last-minute budget squeezes. With departments across institutions spending in silo, it becomes very difficult to get a complete view of spending. Teams may be making repeat orders when one bulk purchase would be cheaper, or they may be paying multiple delivery fees when their orders could be bundled with those from other departments. In short, they can’t get complete value for money if they don’t know exactly what they’re spending.

But, Soldo suggest, with an expense and spend management platform, it’s quicker and easier to see every purchase an institution makes. That means it’s much simpler to identify where savings can be made. For example, automated systems replace custom spreadsheets with a single dashboard that allows finance teams to view and track every payment. So, it’s much simpler to see where regular purchases, like printing or paper, can add up to unexpectedly large totals. Or where VAT isn’t being claimed back in full after school trips or training. And it’s easier to manage contracts, shop around for better deals and avoid expensive renewals or long contract periods. Automating systems also allows institutions to identify where new and sustainable technology could replace inefficient equipment, or where it would be better to outsource services or bring them in house.

Many schools and universities also rely on subscriptions. These can include web portals for online learning and parent communication, or systems that manage tuition payments and attendance records. If individuals in different departments are managing these subscriptions with credit cards, it becomes awkward and time-consuming to identify exactly what subscriptions the institution is spending on and where they may be paying out every month for duplicate or outdated accounts. With an automated system, recurring payments like subscriptions and online advertising spend can be managed centrally so finance teams get a complete overview. That means it’s easier to identify and reduce wasted money.

As UK prices continue to rise and we face a possible recession at the end of 2022, spending and savings remain a priority for education leaders. To avoid making staffing cuts or reducing what they offer to students, Soldo believe it’s key that institutions focus on getting the best value for money they can with the spending they are making. And automating their manual processes is a key recommendation, to help them cut unnecessary spending, identify where savings can be made, and make the most of every pound.