Be Honest…Does Spend Planning Really Save Time and Money?

For Federal Managers, spend planning provides confidence that you are anticipating your expenses as much as possible, but does it actually save time and money?  With tighter budgets anticipated for FY24, planning and managing your spend becomes more critical. 

Let’s look at how spend planning helps you save time and money. 

1. Budget allocation: Spending planning allows you to allocate your budgets strategically. By analyzing your needs, priorities, and available resources, you can determine the most efficient and effective way to allocate your funds. This ensures that the limited resources are directed towards the most important projects and initiatives, avoiding unnecessary expenditures and saving money.
2. Cost control: Spending planning helps in controlling costs by identifying potential areas of waste or inefficiency. It allows agencies to assess the costs associated with various projects, technologies, and solutions before making investment decisions. Spend planning allows you to forecast your spend and then monitor as you execute your budget. One effective way to control costs is to manage contracts and IAA using Estimates to Complete (ETC) so you continuously monitoring spend needed as the year progresses.  ETCs aren’t just useful in mitigating cost overruns, they also let you see where you may be underrunning and can reallocate funds.  
3. Avoiding redundancies: Spending planning helps in identifying redundancies and duplications in investments. This can occur when different departments or agencies procure similar technologies, services, or systems independently. By coordinating and centralizing spending decisions, agencies can consolidate your requirements, streamline procurement processes, leverage your buying power, and eliminate unnecessary duplication of resources, leading to cost savings. Redundant purchasing also duplicates efforts.
4. Enhanced procurement practices: Spending planning enables agencies to plan your procurement activities in advance. This allows you to leverage strategic sourcing, negotiate better contracts, and take advantage of economies of scale. Effective procurement practices, driven by spending planning, can lead to cost savings and more efficient utilization of resources.