Stanford Financial Management Services (FMS) undertook a simplification initiative that identified three key lessons that inform the unit’s ongoing work – and aims to make work easier for colleagues across the campus community.
Through new technologies and revised policies, Stanford is streamlining the way it buys and pays for goods and services, from lab equipment to construction services.
One size does not fit all
Applying rules only where required for compliance and efficiency streamlines purchasing for teaching, research, and health care. Key changes in March 2025 adjusted thresholds for central approval of competitive selection to better align with these rules.
Increased thresholds: from $25,000 to $50,000 for federally funded purchases, and from $25,000 to $250,000 for non-federally funded purchases.
Result: Purchase orders move faster and units save at least 20% of processing time due to fewer central reviews.
Keep it simple
To prevent information overload and unnecessary steps that bog down administration, FMS, in collaboration with schools and units, is:
Reducing complexity: Cut Administrative Guide Memo and web content related to buying and paying activities by over 60%.
Streamlining guidance: Clearly defined and linked applicable rules from federal agencies, such as the IRS requirement for attaching receipts $75 or over.
Leveraging students: Working with School of Engineering students to improve usability of financial systems.
Getting to ‘yes’ safely
Increased use of technology makes the right path easier and moves decision-making closer to where the work happens.
New practices applied to the invoice approval threshold for departments in 2024 include:
New threshold: Payment approval required only for invoices of $10,000 or more (raised from $5,000).
Temporary pause: Invoices above $5,000, but under $10,000, held a few days for department review if needed, then automatically paid if no further action needed.
Automatic: Invoices under $5,000 automatically approved because the department already approved the purchase order.
A payment method introduced this spring streamlines the reimbursement and honoraria payment process for guest speakers and other visitors.
Payee setup: Previously, setting up payees took 13 business days on average, but Easy Pay has cut it to 1.9 days, an 85% efficiency gain.
Faster processing: Total reimbursement processing time reduced to 6.5 business days on average, supporting hundreds of staff who set up and approve these payments.
Authors
Darya Whyte
Chris Peacock
