Buying Right. Saving Money and Time Through Procurement. March 2015

Transcription

1 Buying Right Saving Money and Time Through Procurement March 2015

2 2015 CCSA Mobile Conference App To Download & Launch the App: Search confservices in the app store on your device Open the app and enter event code: 2015 Set Up Your Account: Once you ve completed the steps above, select My Account button to log into the app Enter your address and the password 2015 to complete this step Note: Directions are also listed on pg. 3 of the printed program. Share Your Experience #CCSACon #OMMV 2

3 2015 CCSA Mobile App Session Evaluations Provide your feedback on all CCSA breakout sessions directly from the app: Select PROGRAM Button Under programming header tap the strand that corresponds to the session you want to evaluate Use the arrows on the top to make sure you re on the correct date Scroll down until you find the session title When you are inside a session description, click on the Complete Session Evaluation link under the pink Resources header to complete a quick evaluation for that particular session. Note: Directions are listed on the logistics button of the app. THANK YOU! Share Your Experience #CCSACon #OMMV 3

4 Your Speakers Today Joe Harrington Tait Anderson Roozbeh Khoshniyat Angelica Sammons Director, Executive Vice Procurement Director of Strategic President Manager Operations Partnerships 4

5 Today s Objectives Strategies to secure competitive prices and save money Strategies to improve the procure-topay process 5

6 Benefits of Buying Right Save Money Save Staff Time Increase Staff Satisfaction Stay Within Budget 6

7 The Procure-to-Pay Process Preparing Where to Buy Paying For Items 7

8 Where Preparing What? When? Plan in advance for when purchases will need to be made Before the first day of school? For special events? Ongoing purchases (e.g., copy paper/toner) and set aside budget throughout the year Tip: Develop purchasing calendar Tip: Review budget regularly 8

9 Where Preparing What? When? Develop process to collect information for what needs to be purchased Example: Google Form Example: purchase requisitions 9

10 Where Preparing What? When? Set up vendors Setup accounts and credit applications Know who accepts purchase orders and who requires payment up front Know the lead time required by each vendor 10

11 Where Where/How Request for Proposal (RFP) vs Group Purchasing 11

12 Where Where Request for Proposal (RFP) Strategy Concentrate spend with smaller number or single vendor who will commit to better prices or better service in exchange for higher volume For what category?: Low Volume and High Dollar 12

13 Where Where Request for Proposal (RFP) Examples Liability insurance Copiers Janitorial Supplies Pros Negotiate lower prices, better service Cons Takes time and expertise Single schools may not have sufficient volume 13

14 Where Where RFP Analysis 1. Identify the objective (e.g., better price, better service). Six Steps of an ABC Analysis (or Pareto Analysis) Goal: Identify high dollar categories 2. Collect data on the product category under analysis. The most common data is annual spend per supplier. 3. Rank suppliers in increasing order based on spend amount. A: Lowest spend amount C: Highest spend amount 4. Calculate cumulative impact. Calculate the cumulative impact of the list of suppliers by dividing supplier annual cost by total annual spend, then adding that amount to the cumulative total of percentage spent. 5. Divide Suppliers into classes. Find areas where renegotiating contracts, consolidating vendors, changing strategic sourcing methodology, or implementing procurement deliver significant savings or ensure availability of stock. 6. Analyze classes and make appropriate decisions. 14

15 Where Where RFP Analysis Category A Low Volume/High Dollar Good candidate for RFP Category B/C Consider group purchasing alternatives 15

16 Where Where Group Purchasing Individual vs Group Purchasing Single School VENDOR Multiple Schools Intermediary VENDOR EX: serving 500 students EX: serving 500,000 students 16

17 Where Where Group Purchasing Group Purchasing Options CCSA Charter Advantage Program Purchasing Point NJPA US Communities WSCA Other options District (e.g., LAUSD) school warehouse for surplus, used furniture Pros: Relatively quick to setup/purchase from vendors No specific RFP expertise is required Cons: Still requires comparison of different GPO options and vendors 17

18 Where Efficient Workflow 1. School Office Staff Creates Purchase Requisition 2. School Leader Approves Purchase Requisition 3. School Office Staff Sends PO to Vendor and Stores Copy of Purchase Order 4a. Vendor Delivers Goods or Performs Service at School Site 4b. Vendor Sends Invoice to School Site 5a. School Office Staff Receives Goods 5b. School Office Staff Receives Invoice 18

19 Where Challenges/Recommendations Common Challenges Don t create purchase orders (POs) when required Lose PO s/can t match PO with packing list or invoice Difficult to get School Leader to approve PO Recommendations Go digital EX: Create excel PO form PO to vendors Scan/file the signed purchase order for later matching to packing list and invoice Create regular schedule EX: Give purchase requisitions to school leader every Friday in colored folder Track purchase orders EX: Log purchases into purchase order log 19

20 Where Process 1. School Office Staff Creates Purchase Requisition 2. School Leader Approves Purchase Requisition 3. School Office Staff Sends PO to Vendor and Stores Copy of Purchase Order 4a. Vendor Delivers Goods or Performs Service at School Site 4b. Vendor Sends Invoice to School Site 5a. School Office Staff Receives Goods 5b. School Office Staff Receives Invoice 20

21 Where Challenges/Recommendations Common Challenges Schools with small office staff may struggle to have different individuals ordering and receiving packages Recommendations Designate a delivery location and a delivery receipt person Office staff may not have the packing list Ex. Staff removes shipping boxes before office staff receive items 21

22 Where Paying for Items Process School Office Staff Collects Purchase Order, Packing List, and Invoice and Creates AP Package School Office Staff Gives AP Package to School Leader for School Leader Approves each Invoice in AP Package School Office Staff Collects Approved AP Package from School Leader School Office Staff Submits AP Package to Accounting Team or Enters into Accounting System 22

23 Where Paying for Items Challenges/Recommendations Common Challenges Lost physical invoices Lost credit card receipts School is late paying a vendor Late payment fee s In collections School Leader does not regularly approve AP Package Recommendations Build relationship with vendors Help when school has missed a payment Create regular schedule Ex. Give invoices to school leader every Friday in colored folder Process to collect credit card receipts Go digital Save/scan approved invoices and save to folders by year by vendor (establish naming convention) 23

24 Paper-Based vs. Electronic The process steps are the same However, we recommend moving to an electronic process Simple: electronic PO s/ invoices Comprehensive: web-based procure-to-pay systems 24

25 Comparison of Electronic Procure-to-Pay Options Simple Pro s Leverage existing tools ( , excel/word) most users are familiar with Cheap Can adapt as organization develops procure-topay processes Other Considerations Requires good scanner Need strong naming convention for filing information Comprehensive Pro s Comprehensive approval workflow Strong, searchable filing Robust reporting (e.g., encumbrance data, payment status) Valuable for multi-site organizations Other Considerations Need to choose right vendor partner Integration with accounting system End-users require good technology (internet speed, computers, good scanner) End-users need to learn new technology More expensive User fees ($50-$150 per user per month) 25

26 Examples of Procure-to-Pay Systems SpendBridge ExpenseWatch ESM Bill.com (Invoice processing only) 26

27 Free Consulting Exercise Fill out your assessment worksheet Get in groups of 2 to 3 and pair/share Share with the panelists for feedback 27

28 Thank you! 28