Accounting For Your Customers
Welcome back to another school year which I am sure for executive and management started much earlier than now, however the past week has seen the return of most students apart from those affected by fires and/or the coronavirus. How do your school’s 2020 enrolments compare with budget and the previous year?
The January/February 2020 edition of Harvard Business Review included a focus on the importance of Accounting for Customers including understanding customer retention, value proposition, satisfaction and forecasting the inflow of new customers to predict revenue. Non-government schools have been doing this for years including analysing demographics, enrolment churn (students leaving/total enrolments), inquiry to enrolment conversion and parent and student satisfaction.
Because student numbers are a crucial driver of a financially viable and sustainable non-government school, if your 2020 enrolments are not as expected, how can your school adapt to these changed circumstances?
The 2019 (2018 school year) ASBA/Somerset Non-Government Schools’ Financial Performance Survey (FPS) indicated an average 0.9% increase in enrolments for Independent schools from 2017 to 2018. However, figure 1 (below) shows the number of schools with increased enrolments was almost matched by schools that experienced reduced enrolments.
Figure 1: Average change in enrolments for independent schools that participate in the FPS.
If your school has experienced a reduction in enrolments, Figure 1 indicates that you are not alone. But I encourage you to use the FPS to identify and quantify strengths and weaknesses and respond to these changed circumstances in a timely manner. For more information please see How to identify and quantify financial strengths and weaknesses.
As always, we very much look forward to another year of the FPS and contributing to individual school and sector financial viability and sustainability.
Kindest regards
John Somerset is a Chartered Accountant. He has extensive knowledge of the independent school sector and is past President of Independent Schools Queensland and a past board member of the Independent Schools Council of Australia.
UPCOMING EVENTS:
AHISA Financial Governance Masterclass for Principals, Melbourne—15 April 2020.
WESTPAC School financial Governance breakfast, Melbourne—14 May 2020.
AIS SA School Financial Workshop for Principals, Business Managers and Governors, Adelaide—15 May 2020 and 16 May 2020.
VRQA School Financial Governance workshop, Melbourne—19 August 2020.