During our quarterly CHAMPS Talks webinar last month, Director of Contracting Services Jan Elder shared valuable supply chain solutions that support our member’s capital purchasing initiatives. With capital budget demands increasing, budget processes growing more complex, and costs continuing to rise, the topic was particularly timely.
Capital Purchasing Defined
So what type of purchase falls in the capital purchasing bucket? At CHAMPS, we define a capital purchase as a fixed asset or durable piece of equipment that is used in your day-to-day operations and has a useful life of more than a year. This asset will have a welldefined purchase cost and comes from a separate budget that can be funded outside your operational budget by revenue, grants, investment earnings and/or donations.
Typical capital purchases can be categorized in two different ways: planned and unplanned. Planned capital includes routine equipment replacement and facility renovation that you are expecting and know to budget for. Unplanned purchases happen when an event takes place that would limit your operations or service capacity. Even though this type of purchase cannot be budgeted for, it’s smart to reserve contingency dollars to meet these unplanned needs. We recommend allowing for a 10-20% contingency in your budget to cover unforeseen costs.
CHAMPS Capital Purchasing Success Stories
At CHAMPS, we have four tool categories for helping you save money on planned and unplanned capital purchases:
- Contracts & Negotiations
- Group Buys
- Refurbished & Pre-Owned Equipment
- Benchmarking, Planning & Financing Services
By using these tools separately and combined, we lessen the impact of increased capital purchasing demands and minimize budget strain to find savings for our members. And when one of our tools saves them money, we share in their excitement! Below are a few examples of how we’ve helped our capital-savvy members put our tools to use to cut costs on recent capital purchases:
When you become a CHAMPS member, our resources are always available to you. Most importantly, our national account managers are just a phone call or email away. We are here to assist you at every stage of your capital purchasing project. Does this sound like the type of capital purchasing support you are looking for? Contact us to become a member.