Do you know how to manage school finances efficiently? Learn about the importance of this task and check out 5 steps to put it into practice!
this article will explain what school financial management is, how it works, and why it’s important. Keep reading and check out 5 tips that will help you put it into practice!
What is school financial management?
Despite their main mission being to teach, schools operate in a similar way to a company. Institutions need to pay bills, make investments, buy new materials and equipment, hire a good team, among other financial obligations.
To ensure the proper functioning of the institution, there is school financial management. It involves receiving monthly payments, controlling cash flow , paying employees, defaulting on payments and other important activities.
Furthermore, school financial management also influences other sectors of the school and must be in harmony with them. To this end, it is essential that the financial manager bases his/her budgetary decisions on the Pedagogical Political Project (PPP).
How important is school financial management?
Education sector is going through a very challenging time. In this sense, being able to count on good financial management is essential to ensure the survival of the school.
After all, in addition to paying bills and making investments, the educational institution needs to be profitable. Therefore, financial management is essential to organize processes and ensure that all obligations are fulfilled in a positive and organized manner.
Good management also allows for cost reduction and increased efficiency in internal processes. This makes it possible to prepare a financial reserve for times of economic difficulty.
This shows how financial management is essential in times of crisis or difficulty. After all, schools that already had efficient control over their finances were able to deal better with adverse scenarios.
How to manage school resources in 5 steps?
Now that you know the importance of school financial management, it is important to understand how to manage school resources. Check out 5 steps that can make management more efficient:
1. Set goals and priorities
The first step is to set monthly goals and reserves to meet objectives and contingencies. Plans should include both improvements for the institution and its managers and measures to make the school more attractive to parents, students and employees.
Therefore, the main challenge is to combine a pleasant school environment with profitable management. To achieve this, goals need to be realistic and have defined deadlines. After all, combining unrealistic goals with a tight cash flow, for example, can cause frustration.
2. Make a survey of resources
After setting goals, the next step is to check whether there are resources available to implement improvements in the educational institution. If there are no funds in cash, financial planning becomes even more important.
Knowing the school’s financial situation is essential to establishing ways to generate more revenue. Keep in mind that ambitious goals require long-term investments, and regulating finances is the first step to being able to achieve them.
3. Consider different scenarios
By using data from previous years, managers can make more accurate estimates of the factors that influence the school’s financial success. For example, it is possible to assess the number of cancelled and non-renewed enrollments or defaulting customers.
This helps guide your goals and investments, depending on the results obtained. By analyzing possible scenarios, the manager can also define strategies to face different situations.
4. Reduce expenses
As long as students are not harmed, it is recommended to check which secondary expenses can be cut or optimized. After all, rethinking daily expenses is essential to maintain the financial health of the institution.
Reducing expenses also allows you to secure a financial reserve for the future. This way, you can protect yourself against crises or market fluctuations. Strategic capital reserves are also important to avoid unpleasant surprises, such as repairs and emergency expenses.