3 key problems in School Finance Management & How to solve

Managing finances is crucial to schools of all sizes, especially large-scaled ones. Though School Finance Management is important, it is not an easy task. There is a great volume of information and data to be carefully and accurately handled. This article will walk you through 3 key challenges related to this and give advice accordingly. 

What is School Finance Management?

School finance management includes planning, regulating, and executing a budgetary strategy, as well as bookkeeping, reporting, and asset maintenance. The administration also has to work with vendors for contracts and payments. This necessitates a complex set of daily, monthly, and yearly tasks.

Issues in managing school finance

Inefficient budgetary control 

Budgetary control is a term in finance that describes how organizations manage revenue and expenses. In practice, this entails evaluating actual revenue or spending against anticipated income or expenditure frequently. In schools, budgetary control aids in the development of strategies, important activities, and milestones. Other things such as KPIs, monetary policies, and processes are also included. 

However, inefficient budgetary control has remained a common problem among many educational institutions: 

• There is a lack of professional forecasting. Most schools make a budget plan based on expenditure in the past. However, in most cases, schools do not collect and calculate enough historical data. As a result, it is difficult to make well-informed decisions.
• Budget reviews are not frequent. It takes time and effort to review all the debits and billings. Therefore, schools only review their budget monthly, quarterly, and yearly. If anything unusual happens, the management might not detect it on time. 
• The process to make budget amendments is too complex. It requires authorized approval and this involves a lot of paperwork. 
• There is a lot of human work in the budgetary control process. They have to be very careful, yet humans can still make mistakes. There can also be collusive and corrupt conduct, which leads to budget control failure.

Complicated payment procedures and management

In most traditional schools, there are mainly 2 ways for parents to pay tuition fees. They can go to the school and pay directly with cash. Or they might make a bank transfer, then keep the bank receipt to provide if requested. 

However, both methods have disadvantages. It is time-consuming and costly to travel to school and wait in a queue. Post Covid-19, offline or cash payment is also not recommended. There will be a disruption in payment during a pandemic. Besides, the bank transfer also inherits some financial risks due to the failure of a third party (the bank). 

For School Finance Management, those traditional methods of receiving payments are also inefficient. The offline payment requires human resources to proceed and check. Online payment involves a third party. They are complex and schools do not have 100% control over this. 

Lack of transparency in School Finance Management

Just like in other industries, transparency is important in education. It is important to keep parents in the know of their children’s behaviors. In modern society, parents also expect educational institutions to spend their money in a transparent way.  

Although it is necessary, there is still a shortage of clear financial activities and public disclosure. It is hard to take 100% control over every spending. This is because there’s a lot of paperwork, which is time-consuming to check. The fact that humans are involved in the process also poses a risk of collusive and corrupt conduct. 

One common example of this is bookkeeping. Most documents are physically stored. Apart from the risk of being lost, this also leads to low transparency. The documents are visible to only a few school admins. If an authorized person wants to check the documents, he has to visit the place and check them one by one. He can not keep an eye on bookkeeping on a day-to-day basis. 

School Digitization: A proper solution to Finance Management

What is school digitization? 

Digitization in school management refers to the adoption of technology and digital devices into school operation. It helps streamline the process, minimize paperwork and enhance efficient management. 

An interactive school solution uses both web and mobile apps in the process. For example, in Helen, we provide web portals for school management boards. There are also separate mobile apps for parents, teachers, bus staff, admins.

Impacts of School Digitization on fiscal activities

Digitization is a powerful tool that supports schools in finance management. It is a solution to most current problems of educational institutions. 

Digitization means that there will be less human involvement in the process. Instead, most activities can be done in a fast and automatic way. Parents can pay directly to schools via their mobile app. Data will be updated immediately and then integrated into the school system. This saves time for both schools and customers. Payment procedures and management are easier than ever before. 

With the adoption of cloud-based technology, schools can efficiently upload, monitor, and handle data. All spendings such as purchasing stationery will be visible to management boards. They only need to open the Helen mobile app to control the budget on a regular basis. Real-time information means that they can review and adjust the budget in time. Overall, budgetary control is more efficient. 

In Helen, we also provide a feature that automatically issues debits and billing. This keeps the work accurate and allows for easy documentation. The risk of collusive and corrupt conduct is minimized. And financial transparency is much greater. 

If you are looking for a solution to your school operation, particularly School Finance Management, do not hesitate to contact us at: https://helen.edu.vn/contact-us/

Or you can also learn more about Helen at: https://helen.edu.vn/about/