As of 2017, there were 4,289 colleges or universities in the U.S. Approximately 40 percent of those institutions are private. Because they don’t receive funding from state legislatures, private colleges must rely more heavily on student tuition and donations to cover operating costs. Typically that results in the need for tighter budgets and close monitoring of spend.
Private universities’ financial operations can become even more convoluted if they’re maintaining multiple campuses with a variety of programs. Spend-management software helps university officials to streamline financial operations across locations. It also allows for better budgetary visibility, more effective management of overall expenditures, and the ability to predict outcomes for enrollment or fundraising campaigns.
This degree of insight becomes increasingly important as the amount of money raised by universities continues to grow. According to the Council for Advancement and Support of Education, U.S. universities raised $46.7bn in 2018, which was 7.2 percent higher than 2017.
Good relationships with donors are essential to success. One way to achieve this is by allowing donors to choose where their money goes. A spend-management system includes a dashboard that provides such insight to outside parties. It also allows university executives to control the amount of information that donors are able to see.
The tool helps institutions like George Washington University to centralize and manage expenses across multiple campuses, which might have a number of unique programs and departments. A single incident of misdirection of funds among those sites can result in serious problems. By implementing spend-management software into the back end of their financial or procurement systems, university managers gain access to a full audit trail of all expenditures.
With the amount of money coming in and out of private universities every day, it’s imperative to implement a spend-management solution to ensure compliance and reduce the risk of errors. These solutions will not only make university officials’ lives easier and less chaotic, but also foster positive relationships with alumni and donors.
Stanton Jandrell is CEO of Fraxion.