The right reporting system can give education professionals compliance and reporting confidence; how can schools, academies and multi-academy trusts (MATs) ensure that they have one that meets their needs now and in the future?
You understand that having a good understanding of your school or academy’s financial position is essential if you want to make your money work harder. However, as schools are granted more autonomy and responsibility for their budgets, it is important that everyone understands the role they play. Where heads of department and teachers, for example, are monitoring their own budgets, it’s important that they understand this responsibility in the wider school context. To do this effectively requires a financial system that they can understand with ease – one that gives a clear overview.
So, what does a good financial reporting system look like – now and for the future? We asked the experts…
“A good financial system needs to present data in a way that is relevant to the person looking at it,” says Graham Cooper, head of education at Capita SIMS. A good financial reporting system should enable users to access the information relevant to their role – an SBL, for example, will not only need a clear overview but must also be able to mine down for detail – and the information should be presented in an easy-to-read way for the SBL as well as whoever they might need to present that information to.
“When selecting a system you should establish whether it enhances current business processes and provides assurance – through data security, auditability and process automation,” Andi Brown, director and co-founder of SAAF Education, adds. Another function that will be useful for SBLs is access to real-time information so that they can get the most up-to-date financial picture.
Graham also advises SBLs to consider whether potential suppliers are committed to ongoing developments before they get on board. The education landscape is changing rapidly, and so too is how schools operate; a great school financial system needs to be able to adapt accordingly.
Flexibility for the future
Andi lists some additional key system reporting considerations:
- Can the system generate both VAT 100 and VAT 126 returns? Most academies start out falling under the VAT 126 scheme but may be required to register for VAT if they expand to become a MAT.
- Does it have the capability to analyse finance data in different reporting categories? This will enable statutory returns, such as the academies’ budget forecast return, to be auto-generated or provide user-defined management reporting.
- Is it charity-compliant, with the ability to analyse by different funds? This will support the creation of the year-end stat account disclosures such as the statement of financial activities (SOFA).
- Does it have the ability to store or link to more than just financial data – for example, pupil numbers or staffing records? This enables education professionals to report on vital key performance indicators and supports benchmarking.
Benefits to attainment
Interestingly, having a fully tuned-in financial reporting system can have far-reaching benefits for both students and school. “One school that we work with believes that having better insights into their finances has had a significant effect on their pupils’ attainment,” Graham says. “By being able to examine the areas or projects where investment has made a difference to students’ progress, the school has ensured that further investment is also directed where it will have the biggest impact.” Not only are you able to make strategic investment decisions that ensure optimum outcomes, but you can evidence them.
The benefits of an efficient financial reporting system are multi-faceted. If you want to lead your school, remember it is the primary tool for delivering financial insights and key to supporting strategic business decisions.