Tips for effective financial management in schools

Here are four actionable strategies to help optimise financial management processes in your school.  

1. Embrace integrated solutions that enable more effective financial management

In financial management, good visibility is paramount for process optimisation. You can only see where change needs to happen when you have a true birds’-eye view of your systems, processes, data and budgets — without this, you risk missing an integral part of the picture, or “giving with one hand and taking with the other”. Disparate systems can also increase workload in your workforce, resulting in duplication of tasks and an elevated risk of human error. Embracing integration means using appropriate financial management systems in schools, unifying your processes around budgeting and financial management so that both essential functions can support and inform one another.

Integrated software for finance and budgets can help your school save time, increase accuracy, build a one-stop shop for data and maintain compliance more easily. Access Education Budgets and Access Education Finance can demonstrate exactly how this looks, working together to provide complete financial clarity, run in-depth reporting, create plans for the future and more, with one set of data that becomes your single source of truth. With integrated budgeting and finance software, every aspect of financial management in schools can become more streamlined.

2. Leverage real-time reporting and advanced analytics

Does the idea of “advanced analytics” sound intimidating? If it does, you likely should be relying on your software to do more of the heavy lifting for you. Integrated software uses one pool of data for all reporting and calculations, so there’s instantly the potential to gain deeper, more actionable insights. Reporting capabilities are an important facet of any software you use — in general, schools should look for custom reporting that can provide bespoke, actionable insights that align with individual concerns and KPIs. Real-time data is also an invaluable tool for schools when it’s used to generate up-to-the-minute reports, helping to show current performance, inform decision making and stop potentially costly mistakes in their tracks.

3. Streamline budgeting and forecasting to plan for the future with ease

Budgeting and forecasting can become largely automated with the right software to run scenarios for you. Software like Access Education Budgets is adept at modelling a range of “what if?” scenarios, taking staff salaries, pupil numbers, expenses and more into account. By understanding the potential outcomes, budgeting and forecasting fall into place much more easily. Automation makes it much easier to submit your three-year budget forecasts, but you can run different scenarios throughout the academic and financial year to stay on track and respond in real time to changing dynamics.

4. Set your financial goals and align them with wider KPIs

What do you need to achieve financially? And what does the school need to achieve in the next academic year? Looking further ahead, what challenges need to be overcome? Asking these questions is important when setting financial goals and creating budgets, considering the practical needs of the school. Perhaps a particular contract is coming to an end, or building maintenance will be required. Understanding key events and working them into the strategy serves to strengthen your financial management.

Financial management for maintained schools

For maintained schools, balancing the budget is becoming increasingly challenging — 15.3% of schools were in a deficit in 2023-24, 2.2% higher than in 2022-23. Automating processes with technology and increasing efficiency can free up time, and enhanced scenario planning can help prepare for future events more accurately. This also has the added benefit of simplifying local authority submissions of budgets, three-year forecasts and the schools financial value standard (SFVS) checklist.

Financial management for academies

Academies can face many of the same challenges with budgeting and financial management, but in the case of multi-academy trusts (MATs), at scale. According to the 13th annual benchmark report, the number of academies reporting in-year financial deficits has tripled to 58% since 2021.

When MATs use different systems across individual schools, technology becomes a barrier instead of a lifeline. Software can offer centralised planning and reporting while also providing trust and academy-level views: with the right approach to financial management, budgets may stretch further as efficiencies are made. 

Financial management for independent schools

Independent schools face a number of roadblocks including tuition fee management, rising costs and maintaining the number of new pupil enrolments. This is against a backdrop of major change that will see VAT applied to independent school fees and the removal of business rate relief. Schools will be able to recover VAT paid on some business expenses, but this will place increased demands on administrative staff and there will still be deficits. It’s estimated that 15-17% fee increases will be passed on to parents.

Tools to help manage tuition fee payments and resource allocation can be useful, and when underpinned by efficient and informative forecasting, it becomes simpler to plan ahead and accommodate change. 

The future of effective financial management in schools

Embracing the right technology is transformative for financial management in schools, with integrated tools, real-time insights, powerful reporting and streamlined budgeting coming together to save time, effort and money.

Flitting between disparate systems is a common problem for schools and one that we understand only too well as specialists in the education sector. Tackle the problem head on with one package, one contract and one predictable price — the Financial Focus bundle has been built for you to combine finance and budgeting software along with complementary modules.