Financial management is an ongoing task. On a day-to- day basis you need to
maintain the expenditure record, monitor your expenditure and make decisions for
improvements to financial management.
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For it to be of value, the expenditure record must be kept up to date. If you need to
insert lines in the spreadsheet, make sure they are above the totals row so that the
amounts are added to the totals.
The master expenditure record (derived from expenditure record template should
be maintained and managed by the financial manager as it may contain sensitive
data such as staff costs.
On a day-to-day basis financial administrators can use the expenditure record
template and the financial manager can cut and paste the contents into the master.
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It is important that you use the information you have gathered in the expenditure
record to monitor where and how money is being spent. We have created a
graphical representation of the column totals in the expenditure record template so
that you can see more clearly the differences in expenditure between the different
types of item. Note that if you need more rows, you should insert them above the
totals row of the spreadsheet to make sure that all expenditure is included in the
totals and the graphs. Our expenditure record example also shows example
graphs.
These reports will help you make decisions about the day-to-day cost and financial
management of ICT and will also help you prepare your budget for the next year or
budgetary period. You should also use them to review the usefulness of the
categories. If the 'Miscellaneous' column has a high figure, you should consider
breaking this down into more specific categories. If you have not used some other
columns very much, you may wish to incorporate them into the 'Miscellaneous' or
another, more relevant, column.
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Use the reports from the expenditure record to identify areas where it may be
possible to make cost reductions. Below are some suggestions for report
interpretation.
- Look for the biggest costs. These are the ones worth considering for possible
cost reduction, as that will have the most impact.
- Don't forget that some costs are for the whole year and your report may not go
that far yet. They may appear to be the biggest costs but once spread across
the whole year or budgetary period, the picture may change.
- Look for trends in purchasing to identify where you might be able to buy in
greater bulk in the future. For example, if you notice that you buy a small batch of
mice every month you may be able to anticipate the overall requirement for the
budgetary period and negotiate a discount.
- Investigate ad hoc costs such as one-off supplier charges. You may be able to
eliminate these by reviewing contracts and adding new requirements as they
arise. Alternatively, you may identify an internal training issue that, if addressed,
will prevent unnecessary support calls that incur a charge.
Always remember that statistics should not be taken at face value. They require
some interpretation and often some investigation as well. However, it is worth the
effort because knowledge helps you to make improvements and in this case the
improvements are cost related.
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While you may not be able to dictate the size of your ICT budget, you can at least
plan how to spend the amount you receive. This is where your expenditure record
for the previous period will be useful.
- Use the previous year's figures to estimate supplier and support costs to
allocate in the new budget.
- Use the expenditure records over the years to identify when equipment may
need to be replaced and make sure that the new budget takes that into account.
- Consider ways to reduce the cost of support contracts by identifying training
needs and investing in training.
- Use the evidence of past experience to highlight the real cost of ICT and
consider methods of raising additional funding.
- Remember to align the budget- planning exercise with the requirements of the
technical support strategy which can be found in the FITS Introduction.
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