How to manage multi-school incomes: can't stand the heat?

School catering is a good example of the practical limitations of autonomy for schools.

Catering is an increasingly complex business. There are local management issues – meal take-up, the number of free meals, complying with food standards – along with the growth of cashless catering payments.

In many cases, autonomy has led individual schools to develop their own bookkeeping and record-keeping systems for managing their catering.

This then becomes an administrative challenge for Multi Academy Trusts (MATs) and authorities when it comes to reconciling all the balance sheets of these different systems.

The issue with reconciling sometimes incompatible catering management systems also applies to managing income in general.

Modern schools will have various income streams, from catering to school trips, Gift Aid donations and a diverse range of activities. They are individual businesses, but with a single, governing body.

Managing income at authority or trust level isn’t simply a case of improving overarching systems as best practice. It’s also a question of meeting statutory obligations.

Governance and Managing Income

One of the aspects of governance that the Government emphasises for school governing bodies is having adequate financial skills among members.

For individual schools, this is about:

• Managing budgets
• Planning financial performance
• Avoiding financial loss or waste
• Ensuring favourable audit assessments as a result.

But as part of the bigger picture, local authorities and trusts must ensure that the income management of all these individual schools and academies will make sense when it comes to financial reporting.

For instance, a MAT must appoint a chief financial officer (CFO), who will then be responsible for producing management accounts and reports.

The regulatory obligations of the CFO include:

• Coordinating processes for planning and budgeting
• Disciplined financial management, including banking, cash-flow and debt management
• Preparing monthly budget monitoring reports.

Obviously, the CFO cannot meet these regulations properly unless they have the right financial information from the various individual academies within the trust.

If any single academy has, for example, a catering financial management system that is out of step with others, then this will have a knock-on effect for the income management of the entire trust.

Where Bookkeeping Meets Management Accounting

Financial processes are important. If we look again at cashless catering in schools, this can be a highly effective method in streamlining catering operations and looking after the books.

But any system is only as good as its management. Without an overarching income management system in place, local authorities and MATs are likely to struggle to maintain clear, up to date accounts and meet their statutory obligations.

This comes back to the trade-off between autonomy and centralisation.

Autonomy can encourage individual schools to manage themselves responsibly but dynamically. But ultimately, it needs a centralised system underpinning it, for the authority or trust that is ultimately responsible.

If you apply this to income management, then day-to-day bookkeeping is what goes on at the individual level, but management accounting is the thing that makes the system work as a whole.

The risk with schools each having their own systems, which don’t talk to each other, is that this off-the-cuff bookkeeping actively hinders broader income management and makes management accounting overly complex.

And while the Government advises that MATs should embrace automation for management accounting, this too depends on the compatibility of different systems in use.

Integrating School Bookkeeping Solutions

The key to good management information systems and effective payment processes is compatibility.

Automation has potential benefits to offer schools and academies, but the most effective software and platforms in the context of broader administration will be system agnostic.

When the bookkeeping tools schools or academies use are system agnostic, they will work more effectively with other systems in real-time.

This solves the centralisation conundrum. Individual academies or schools get to retain their autonomy, but this doesn't harm income management for the wider trust or authority.

Income management isn’t only about the level or nature of data and transactions managed or recorded. Processes are hugely important too.

If the process talks a common language and it's applicable across different systems, the entire income management ecosystem is more manageable

How Tali Supports Best Bookkeeping Practices

Tali is an advanced but practical and user-friendly bookkeeping platform. It enables users to:

• Record voluntary donations
• Complete banking processes
• Process Gift Aid claims
• Reconcile bank statements
• Monitor free school meal uptake
• Manage multiple schools and kitchens.

The platform is highly versatile because it's compatible with other accounting and payment platforms, including ParentPay, Sage, Xero and Schoolmoney.

Benefits of Centralised Income Management

Oversight is a key issue for MATs and local authorities. At the same time, rigid centralisation isn’t easy or desirable to apply to the various schools and academies that report to these governing bodies.

One answer to effective income management is to have better control and visibility of bookkeeping processes, which, in turn, collect and process vital payment income information.

Tali offers this improved control and visibility, as a dedicated bookkeeping platform for the education sector. It also improves income management communications for schools with a specialist notifications service.

To find out more, please talk to the Pebble team today.