Funding For Schools: How To Plan Your Asset Finance Procurement Process
Funding school equipment with a solid leasing plan can help schools to get what is required to provide students with the tools necessary for a good education. Instead of buying outright, school leasing can significantly help school managers to organise their cash flow more efficiently, by reducing capital outlay and allowing schools to make regular payments over a longer period of time.
If you do decide to put together a plan for leasing school equipment, it will pay to have a clear asset finance procurement process in place. A solid procurement strategy for your school will mean a more streamlined school leasing plan, which will help you to choose the right supplier, and effectively manage the entire process, as well as your budget.
Your Procurement Cycle Plan
Specify Your Equipment Procurement Objectives & Budget Allocation
Before jumping straight into the deep end, you may want to spend time getting together a business case and a procurement system process that defines:
- Your objectives
- The equipment required during the financial year
- Annual budget allocation
This will clearly define what you need from your asset finance provider, and will provide you with a clear equipment specification for approval.
Ask yourself what you want to achieve when putting together your business case.
Do you want to achieve:
Maximum benefit for best value?
Compare like for like. If you’re researching a lease contract for school IT equipment, it’s important to do your homework to ascertain whether one contract exponentially differs from another. Ask if one asset finance provider can offer more incentives, more assistance, or a better maintenance contract than the others. This will help you to decide which deal will give you the best value for money.
A sharing of the risk?
Under an operating lease, it is the responsibility of the lessor (the asset finance provider) to retain risk of ownership for the assets you’re leasing. This means that while your school is able to take advantage of the use of the equipment over the pre-agreed period of time, the lessor will still essentially own the equipment, and so will have the responsibility of taking the equipment back at the end of lease in spite of the fact that the equipment in question may have substantially decreased in re-sale value.
An opportunity for assistance?
By leasing school equipment from a third party supplier, you will also have the benefit of their support and guidance. This may come in the form of maintenance assistance, whereby a certain level of service for your school equipment can be made a part of your contract.
Overall, research is key at this stage in your finance procurement process. Once you’ve pinned down your objectives and detailed your equipment specification, you can then explore your leasing options with a supplier to ensure they align with your needs.
Choose A Credible Supplier
Choose an asset finance provider based on not only the contract they can offer you, but how transparent they are as well. Don’t be afraid to investigate the finer details of the contract they propose for your school equipment. Check that they are experienced in your sector and able to ensure compliance with all local authority regulations. Any financial regulations in question and contractual rules that need to be followed should be discussed in detail before signing on the dotted line.
Manage Asset Procurement and Lease Setup
The stage at which all parts of your school lease agreement should be finalised and the contract signed on the dotted line. Assets should now be ordered and standing orders set up.
At this stage in the cycle, it’s beneficial to discuss the importance of continuous management of assets to include maintenance and repairs. Also, make sure you are monitoring your budget, and work with your asset finance company to ensure regulations are followed, and payments are carefully tracked, allowing you to benchmark spend for future reference.
By detailing your objectives, outlining budgets, and successfully identifying the right finance and asset management provider to work with, you will be able to streamline your asset procurement process. Use your procurement cycle plan to successfully manage your school’s procurement strategy, and on-going asset finance requirements, from one financial year to the next.
Alternatively, contact our team of experts at Maxxia. With years of experience assisting schools with their financial asset management systems, we can provide you with a compliant agreement and continued support throughout your complete procurement cycle.