11 February 2020
Getting value for your money may seem quite a simple thing - but is your trust really getting it?
When it comes to things like buying pencils or paper, getting value for your money is fairly obvious as it will basically come down to price. But when your Trust is buying bigger ticket items, or services such as external audit, internal audit or payroll services - it isn’t just the price that is important - but what you are actually getting for your money.
Price is not the only consideration
Most Trusts will follow their internal financial handbooks when purchasing goods and services and, depending on the value of the purchase, will get three quotes, or go out to a more formal tender process. When going out to tender, it is really important to consider your evaluation criteria so that everyone in your team who is assessing the tender returns knows what they are looking for and what factors are important to your Trust.
If we take audit as a good example, most Trusts will consider the price as the primary consideration, thinking that this is the biggest driver of value for money - but that is not always the case. The price quoted may be for just the audit, while accounting assistance and those ad hoc queries that always seem to come up may be additional costs. This means that the level of service that you receive from one auditor compared to another may be very different, and what appears to be good value for money, actually may not be.
The questions you should be asking
- Is your Trust taking advantage of bulk ordering common items?
- Are you using the different framework agreements that are out there?
- Do you regularly review your suppliers to ensure that they are delivering on the KPIs agreed at the start of the contract?
- Are you taking advantage of educational discounts that are available?
If the answer is NO to any of these questions, you might want to consider reviewing your current processes to ensure that you are still achieving value for money.
Changing your working practices can also deliver value for money. This might seem a bit odd, but if your finance team spends days preparing month end reports, comparisons against budgets, or even preparing the monthly payroll, swapping over to a new accounting system or outsourcing your payroll to an external supplier could make a huge difference to the amount of time your team has to work on those other important areas - that can too easily be pushed down the ‘to do list’.
If you think your Trust could be more efficient, but not sure how, then talk to one of our Academy experts who will be able to help.