Library Digital Budget Tracker: Know Where Your Money Goes

Why You Need This

Most libraries track their digital spending through their accounting system, but accounting doesn't tell you:

• Cost per unit of access: Are you paying $1,000 per month for 100 active users? Or $5 per month?
• Trend analysis: Have your ebook costs gone up 15% year-over-year? When did that start?
• Redundancy: Do you have three different database vendors offering similar content?
• Utilization: Are you paying for resources that nobody uses?
• Negotiation data: When vendors say "this is our standard rate," you have no way to know if it's true

Budget tracking doesn't tell you these things because accounting is designed to track money, not usage. This template bridges that gap.

What This Tracker Includes

1. Vendor Spending Summary

A monthly snapshot of what you pay to each vendor, organized by service type (ebooks, databases, platforms, etc.).

2. Usage and Cost-Per-Unit Analysis

Track how much you're paying relative to actual usage. This is critical for negotiation.

3. Year-Over-Year Comparison

Track price increases over time. Most vendors raise rates 3-8% annually. You should know this.

How to Set Up Your Tracker

Step 1: Gather Your Invoices (30 minutes)

Pull 12 months of vendor invoices. Yes, all of them. You're looking for:

• Vendor name
• Invoice date and amount
• Service description (what you're actually paying for)
• Contract end date (usually hidden in the fine print)

Step 2: Create Your Master List (1 hour)

In a spreadsheet or shared document, create a row for each vendor. Include:

• Vendor name
• Service type (Ebooks, Databases, Streaming, etc.)
• Monthly cost (calculate average of 12 months)
• Annual cost
• Contract renewal date
• Simultaneous user limit (if applicable)
• Can you cancel mid-contract? (Yes/No)
• Contact person at vendor
• Notes (restrictions, quirks, etc.)

Step 3: Calculate Cost Per Unit (30 minutes)

For each major vendor, calculate:

• Cost per checkout: Pull your ILS/platform usage data for each resource. Divide annual cost by annual checkouts.
• Cost per user: Divide annual cost by registered users (not all patrons, just those with active access).
• Cost per database query: For databases, pull usage statistics. Divide cost by search queries or sessions.

Step 4: Identify Trends (1 hour)

Look for:

• Rapid price increases: Any vendor raising rates >5% annually is aggressive
• Low utilization: Cost per checkout >$5? That's expensive. Consider alternatives
• Upcoming renewals: Mark contracts expiring in the next 6 months. This is your negotiation window
• Redundancy: Do multiple vendors offer overlapping content? Consolidate if possible

Step 5: Benchmark Against Peers (2 hours)

Your system size likely matches other similar libraries. Ask your network:

• "What do you pay OverDrive annually?"
• "How much does EBSCO cost at your institution?"
• "What's your cost per ebook checkout?"

These conversations reveal if you're overpaying. If you're 30% higher than peer institutions, that's a negotiation talking point.

Using Your Data for Negotiation

Before Renewal: Build Your Case

When a contract is expiring, you have leverage. Here's how to use your data:

• "Last year you cost us $X. Your renewal proposal is $Y, which is a +Z% increase. That exceeds our budget growth. What can you do?"
• "Your cost per checkout is higher than [competitor]. What justifies the premium?"
• "We have [X checkouts/queries/uses] from your service. Here's our usage data. Can you adjust pricing accordingly?"
• "Peer institutions pay [X] for similar services. Your proposal is [Y]% higher. How do we align?"

During Negotiation: Lead With Numbers

Vendors expect emotional arguments ("We value your service!"). Lead with data instead:

• Show your cost history and price increase trends
• Compare your costs to peer institutions
• Demonstrate usage data that justifies (or doesn't justify) current pricing
• Ask for specific pricing models (cost per use, per checkout, per concurrent user) that align with your actual usage

Middle Ground: Propose Alternatives

Don't just say "Your price is too high." Propose solutions:

• "Instead of 5 simultaneous users at $X/year, what's the cost for 3 users?"
• "Can you offer a pay-per-use model instead of fixed annual cost?"
• "If we commit to a 3-year contract, what discount applies?"
• "Can we bundle with your other services for a package price?"

Red Flags in Your Data

Cost Per Checkout >$5

You're overpaying. Ebook checkouts should cost $1-3. Anything higher suggests:

• You're paying for underutilized content
• You have too many simultaneous licenses for the demand
• The vendor's pricing model is aggressive and not aligned with your actual usage

Action: Reduce licenses or switch to a pay-per-use model.

Year-Over-Year Increases >5%

Vendor inflation. Publishers use the justification "market rate increases," but this is often code for "we can get away with it." Action: Budget for this. Allocate 5-7% annually for vendor price increases.

Contracts Without Exit Clauses

If you're locked in for 3 years and want out after year 1, you're stuck. This is intentional. Action: Always negotiate for early-exit options, even at a penalty.

Usage Data You Can't Access

Some vendors make it hard to get usage statistics. This is intentional: they don't want you comparing costs to usage. Action: Demand usage data as part of your contract. Make it a requirement for renewal.

Building Institutional Memory

Keep your tracker updated monthly. In 2-3 years, you'll have:

• Clear cost trends over time
• Data on which vendors are raising rates fastest
• Documentation of when contracts expire
• Evidence of what you've paid for past 36 months

This becomes your negotiation playbook. Vendors prefer you don't have this data. You should.

Sharing Your Data (Carefully)

Your tracking data is valuable for the broader library community. Consider sharing:

• Aggregate cost data: "We spend $X on databases, $Y on ebooks, $Z on other digital resources"
• Peer benchmarking: If safe to share, compare your costs to peer institutions publicly
• Anonymized vendor information: Share costs without naming vendors if you're concerned about vendor retaliation

Don't share:

• Individual vendor contract terms (these are often confidential)
• Negotiation tactics or internal budget discussions
• Anything your director asks you not to share

Template Resources

Questions for Your Director

• Can you pull 12 months of vendor invoices so we can see spending trends?
• Which vendors have contracts expiring in the next 12 months?
• Are there vendors we pay for but rarely use?
• Do we have budget authority to negotiate prices, or is this centralized in procurement?
• Can we get usage data from our vendors to calculate cost per use?

Pro Tips

• Track everything: Don't just track major vendors. Include small databases, specialty resources, and bolt-on services. They add up.
• Note contract end dates: Your biggest negotiation leverage is 3 months before renewal. Create a calendar alert.
• Get vendor contacts: The invoice has a billing contact. Get the decision-maker\'s email. You\'ll need it.
• Document price increases: When a vendor raises rates, note the % and reason. Over time, you see patterns.
• Ask for historical pricing: When negotiating, ask vendors: "What did you charge [peer institution] for this service last year?" This reveals their flexibility.