The Association of School and College Leaders recently stated that schools need an extra £5.7 billion to give every child the education that “society expects and children deserve”. And with Civica’s recent report, ‘Financial management fit for the future’, finding that 82% of education finance departments have been asked to reduce budgets, the road ahead looks increasingly complex.
A further report, from the Education Policy Institute, found that academies which are part of large multi-academy trusts (MATs), are generally less likely to have in-year deficits than stand-alone academies or those in small ‘starter’ trusts, perhaps as a result of their centralised overview of finances on a digital platform. It’s vital, therefore, to look at the current digital landscape for MATs to see how the cloud can be used to uncover relevant data insights, and the risks of not doing so. Here, we explore the four main ways cloud software can bring agility and real-time insight to drive more effective management of finances for schools.
By creating a complete view of their financial data, MATs can more easily see where overspending is happening, or is at risk of doing so
- Free up valuable time
Our research found that 14% of MATs have not yet centralised their finance systems, despite evidence which suggests that they are less likely to be in deficit if they do so, according to the Kreston Academies Benchmarking report.
Over 80% of school finance managers are being asked to make further savings. This, combined with the extra time spent on administration, means that finance managers are not able to spend time spotting trends and anomalies that could help them save money and continue to grow. Standardising financial reporting and forecasting will alleviate some of the pressure on the finance team, allowing them to focus on maximising budgets while student numbers grow and demand on services rises.
2. Create a single view of finances
By creating a complete view of their financial data, MATs can more easily see where overspending is happening, or is at risk of doing so. Finance and operations managers can use this full insight into academy finances to operate as a single entity, helping them streamline their processes while continuing to grow.
This cloud-based consolidated database can then be used by trustees. By gaining real-time insight into the financial health of a MAT with ease, trustees and head teachers alike will have a much clearer picture of income and expenditure, creating a secure and auditable process.
By embracing a centralised cloud-based finance system, MATs can develop benchmarks for each academy which will help inform future planning and governance
3. Help find new and previously hidden opportunities
Access to real-time data is vital. Just as any organisation would use relevant insights to improve their business, MATs need the tools to think and act like a business to transform the way they operate. Cloud-based software can help them in their drive to be more flexible. Opportunities to maximise budget are constantly changing, and academies and trusts need reliable systems that can easily grow with them to offer them the flexibility required in today’s changing landscape. This, combined with a centralised database, will allow MATs to make savings and create further efficiencies, such as negotiating favourable rates with suppliers and sharing financial best practice across academies.
4. Develop benchmarks
Our research also found that 36% of school finance managers are unable to quickly produce management reports, which combine financial data from all academies in their trust. This limits their ability to work effectively, again reducing the time they allocate towards making the most of their budgets. By embracing a centralised cloud-based finance system, MATs can develop benchmarks for each academy which will help inform future planning and governance.
This will provide head teachers with the insights they need to compare accounts across academies, gain a better understanding of financial health, make it easier to share best practice, and ultimately deliver better outcomes for learners.
Schools need to make the most of what they have available. Key to this is centralising data and resources using cloud software which can easily scale and provide fast analysis of insights across more than one organisation. By doing so, MATs will obtain a complete view of financial data to help spot opportunities for cost savings and efficiencies. With greater insights into where money and time is spent and could be allocated, schools will be better placed to make sure students truly receive the education they deserve.
To download the report ‘Financial management fit for the future’, please visit civica.com/finance
Simon Wilde is MD of education at Civica