School Accounts

Advantages of Outsourcing Financial Reports

When reviewing the accounts operations in your school there are two general options to go with – bring it all in-house and employ staff suitable to the job, or outsource part of the accounts to a company or person who provides school financial services.

There are the usual risks and pitfalls of employing staff – the cost of paid leave and other benefits, getting the wrong fit for your organisation, not having the skill set required for all accounting functions, office space/equipment required to house them onsite, the distractions they face everyday, and so on.

Here are some reasons why schools tend to outsource some or all of these functions:

  • Economy: The service becomes an accounts payable item rather than a payroll one. The school can claim GST on the expense rather than pay PAYE.
  • Expertise: Outsourced providers can have a whole team with many skills and strengths among them to problem solve and assist the school strongly in financial processes. They are continually upskilling, but not on your time.
  • Efficiency: Outsourced providers can focus on your accounts with no other distractions, and mistakes are rare. They already know the fastest way to handle accounts.
  • Endorse: Providers keep up with changing laws and regulations; that same expertise can also provide confidence around compliance, separation of duties, and reduction of opportunities for fraud.
  • Expand: As the school grows or change occurs, your providers can easily change their services accordingly, to expand or contract quickly. This provides flexibility that in-house staff just can’t provide.

Most of the benefits of having staff onsite can be matched with the benefits of outsourcing, especially if that provider is treated like part of your team and are great people to deal with. That ‘great to deal with’ factor can be what makes one provider stand out above the rest.

School Accounts

Reviewing your Accounting Provider

Many Boards of Trustees and Principals like to review how the accounting and reporting arrangements are going at this time of year when they are also setting budgets for the year ahead.

Regardless of whether you are anticipating change or not, here are a few good questions to think about:

1. Are we getting up to date information in good time, in order to stay ahead of financial indicators?

2. Are we getting reports the Board members can understand?

3. How did our year end process go? Did we supply auditors with all they needed ahead of time and easily meet audit deadlines? Did our annual report provider communicate well with the auditors, and in a helpful manner?

4. Are current school accounts employees well supported to work efficiently? Do they have someone to call on should transactions or events occur outside of their area of expertise?

5. Do we have management staff currently involved with finances who are overwhelmed with their portfolio?

Whether you have a business manager, school executive officer, finance accounts staff, or an outside provider co-ordinating your monthly and annual reports, the answer to these questions can help you assess the suitability of the current situation.