Educational Accounting Software

Posted on 6th Dec 2018

Becoming an academy can be exciting and unnerving in equal measures. Academy status comes with more independence and freedom, but it also comes with extra responsibilities that can burden school leaders.

The biggest difference between managing a maintained school and managing an academy is that academy leaders have complete control over their finances. That’s why it’s vital for those in charge of government money to have the right tools for the job.

Different types of academy

There are different types of academy with different organisational structures.

The most important distinction is between single-academy trusts and multi-academy trusts (MATs). A single-academy trust is generally formed when a single school converts to academy status and takes complete control over their financial affairs and dealings.

A MAT is a group of academies that are governed by one central organisation, one board of directors and trustees.

There are different types of MAT, some are small and based on local school allegiances. For example, a secondary school can create a MAT with two or three ‘feeder’ primary schools in the local area.

Other MATs are made up of dozens of individual academies and are generally sponsored by businesses, faith groups or another large body.

Another important distinction between academies is whether they are a ‘convertor’ or a ‘sponsored’ academy. Converter academies are generally higher achieving schools which are allowed to convert to academy status without assistance from a larger MAT. These types of academies can form single-academy trusts or recruit other schools and create their own MAT.

Sponsored academies are forced to join a MAT. Sponsored academisation has become the dominant model as the government is generally no longer in favour of schools converting independently.

Legally speaking, free schools are another type of academy. Like other academies, they are funded by the government, but they tend to be run by independent groups and parents. They have more control over things like staff pay, the length of the school day and the curriculum.

The amount of control that an academy has within their trust will vary according to the size and type of trust they find themselves in. Free schools clearly have a lot of freedom and single-academy trusts have a high degree of independence. The amount of control that a MAT academy has varies according to the size and type of MAT.

Whatever the case, it is important that academies use tools that are suitable to them.

Extra responsibilities for academies

Overnight, the staff at new single academy trust will get a number of important responsibilities that they would previously never have had to deal with. Multi-academy trusts have even more to worry about because they bear a broader responsibility for the individual academies under their umbrella.

Looking after government money is one of the most important things new academies will have to deal with, because it has a knock-on effect on so many other aspects of school management, and government oversight is so strict.

The academy’s financial team will be responsible for looking after the payroll, pensions, purchasing, and staffing costs.

Academies that fail to control their finances effectively often fail quite quickly. That’s why the government makes it mandatory for academies to use accounting software to make sure their accounts are managed properly and to make monitoring easier.

The management team will also have to take over some less obvious jobs that were previously handled elsewhere, such as legal matters, compliance with national and European legislation, monitoring staff performance and disputes with unions.

Ten questions to ask before purchasing academy accounting software

There are many different accounting software packages available, but you need to make sure you get the right one for your academy or MAT.

Here are ten questions to ask yourself before choosing a new accounting system.

Is it designed for the education sector?

Software that is designed for schools should differ from software designed for some large corporations. There are some distinctive aspects of school financial management that should be accounted for in the software.

Is it flexible?

Make sure your future actions aren’t hindered by your software choice.

Choose a software package that is flexible with your needs and can grow or shrink with your needs and can work with different bank accounts.

Is the software web-based?

Software which stores data in the cloud and can be accessed from any computer via the web is more useful than software that is restricted to server-level machines.

Is the processing simple?

With everyone a little strapped for cash at the moment, it’s important that you ensure that your budgets, however limited, are being used to maximum effect.

That’s why you need a purchase ledger to provide all the information you need to analyse performance and negotiate prices with suppliers to achieve the best possible value.

Is it there a separate MAT layer?

MATs have different organisational layers and it is important that the overarching trust can monitor constituent academies collectively and individually.

Can the system be updated?

One of the distinctive elements of education finance is that things can change all the time. New legislation, new regulations and funding changes can change an academy’s accounts several times a year.

Make sure that your new accounting software is easy to update and upgrade and that any updates are included in the initial cost forecast.