We run a number of presentations each year using the Financial Survey for Schools (FSS) to analyse schools’ performance, pinpoint risks and provide solutions to mitigate these risks. At every presentation we ask for feedback including what worries schools and what more information they want from us.
This year schools are telling us they want to understand industry trends and find solutions to address increasing costs, especially wages, and how to set affordable fees whilst funding capital expenditure and debt servicing.
This is not surprising given preliminary results show average expenses for independent schools rose 10% in 2023 over the prior year and income is struggling to keep pace.
With cost pressures expected to continue in 2024 and 2025, how do schools set fee levels to sustainably fund capital expenditure and debt servicing?
💡 | Solutions
To address these questions, some steps schools can take include the following:
- Develop a detailed budget to at least 2028 which also calculates your school’s past and budgeted key ratios (including income and expenditure per student, net operating margin, staffing, cash reserves, debt and debt servicing) to highlight trends and address areas of concern — be like the canary in the mine to raise warnings.
- Use ratio averages of similar schools to pinpoint areas for continual improvement and inform strategy. 🎬 This video may assist — 20-minute crash course on school analysis.
- Uncover potential efficiencies to restrain fee increases and maintain adequate operating surpluses to meet capital expenditure and debt servicing needs. Don’t over borrow.
- Test strategies using a financial forecasting tool before updating your detailed budget.
📈 | How we can help
- Financial Survey for Schools (FSS) — join over 600 participating schools to make data-driven financial decisions with confidence by analysing trends in your performance plus compare with similar schools. Every participant adds to the comprehensive dataset which benefits all schools and drives industry progress.
- Budget Model — If you don’t have a reliable school budget model, contact us because we have a very detailed three-way (comprehensive income, financial position and cash flow) model that references back to sample average KPIs that you can obtain from the FSS.
- SKI Scenario Builder™ — use this FSS tool to easily evaluate the financial impact on budgets for changes in key metrics and test strategic scenarios. This tool reduces forecasting to seconds enabling you to meaningfully discuss strategies while the key decision makers are in the room.
FSS | Participate now to take advantage of early bird prices
Even though the FSS is always open and can receive participant data at any time until April 2025, schools are encouraged to complete their 2023 school-year data entry by 30 September 2024 in readiness for the 2024 strategy and budget season.
Participation starts from AU$913 including GST (half price if less than 250 enrolments). This includes an early bird discount if you complete data entry by 30 September 2024.
Q | Any questions?
For more information about the FSS or our budgeting and reporting tools, please do not hesitate to contact Cathy or Jessica at survey@somerseteducation.net or call 1300 781 968 (from outside Australia +61 7 3263 5300).
If I can help in any way with the financial governance of your school, please contact me at john@somerseteducation.net or mobile 0417 618 899.
We look forward to your ongoing support, or if new to the survey, we warmly welcome you joining in.