Best wishes for a successful 2023

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As we head towards the holiday season, it’s time to be thankful for the 2022 year and look forward to a successful 2023.

Thank you for your participation!
Thank you to over 600 schools that have so far contributed in this year’s Somerset Education Financial Survey for Schools (FSS). There are also a number of schools that have started the survey but not yet completed – I appreciate how challenging 2022 has been. I assure you it’s not too late to participate and reap the rewards because the survey is available to enter/change data and generate/re-generate reports until April next year. We did however reward early participants with an “early bird” price and some business managers even received a Somerset Education Yoyo which added a bit of fun to a challenging year.

It is through the collegial support of the survey that we provide simple, factual trend and comparative financial information to identify changing circumstances in your school plus areas that will have the greatest impact on improved financial performance. This helps schools to govern with confidence and reduce financial worries.

Not that I can promise changes in performance, but as an example, an analysis of a group of schools that regularly participated in the FSS indicated a median increase in operating surplus over the past five years of 31% (better enabling facility investment) and a median increase in working capital of 24%. This supports my experience and research that the disciplined use of ratios and benchmarks to measure risk, set policies and monitor performance positively contributes to school financial sustainability.

The data from 2022 (2021 school-year) survey indicates the Independent Schools sector is strong with:

  • An average 2.5% increase in enrolments
  • A five-year average Net Operating Margin of 13.8% (relative operating surplus used to fund debt and facilities)
  • Debt reducing to $8,100 per student ($8,300 in 2020 school-year)
  • A strong Working Capital ratio of 1.3
  • An average of 3.1 months of expenditure held in cash reserves.

I sincerely thank the Somerset Education Team for sharing their skills to provide a professional and personal service to our school clients. I value being able to call a business and talk directly to a real person to assist with a query and trust this has been your experience as evidenced by some lovely unsolicited emails received from schools like: “I applaud your efficiency! Thank you! So much info! Impressive!” Emails like these have really given us a boost during 2022 — thank you.

Somerset Education team celebrating the achievements of 2022 over dinner at a beautiful beachside restaurant.
We are sorry that Helen was unable to attend.

Office closure
The office will be closed from 5pm Friday 16 December 2022 and commence re-opening on Monday 16 January 2023. However if you have queries during this time, please call us on 1300 781 968 and we will do our best to respond in a timely manner.

Study leave
I am taking extra leave in 2023 including some time with our American counterparts as part of my on-going research on predicting financial sustainability in independent schools. I look forward to sharing this knowledge with our school clients and the broader sector. So please excuse me if I am a little difficult to catch during this time but you will be in the capable hands of Jessica and Cathy.

Best wishes for a safe and joyful year-end rest with family and friends, and a successful 2023.

Kindest regards

John and the Team

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 Australia.

Disclaimer: We publish this article only for non-government schools in Australia. All material should be regarded as information only and individuals should rely on their own enquiries when formulating decisions for themselves or their clients. In no way do we warrant or guarantee any changed circumstances for a school from use or non-use of this material. As a member of the Institute of Chartered Accountants Australia and New Zealand, the firm participates in a national liability capping scheme. Accordingly, our liability is limited by a scheme approved under professional standards.

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