With the education sector continuing to experience an ever-challenging financial climate, the need for multi-academy trusts to improve financial performance is greater than ever. Rising costs, skill shortages, and a growing demand for transparency and compliance are just a few of the many financial hurdles MATs are forced to overcome in 2024. Now more than ever, education providers must look strategically at how they can improve their financial performance to ensure long-term success and protect the educational provision for their learners.
For many institutions struggling with the sector wide shortage of financial skills, the concept of improving financial performance seems far from simple. Although it may conjure up visions of spreadsheet headaches for some, improving the financial performance of a trust doesn’t have to be overly complicated or draining — it just requires the right process. This simple 4 step process will not only help your MAT ‘weather the storm’ of 2024’s financial climate, but will free up resources, improve productivity, boost staff satisfaction levels, and can be repeated time and time again to ensure your MAT is constantly optimising, growing, and evolving alongside the changing financial climate.
- Understand your financial data
Neglecting to take the time to fully understand your financial data is a common mistake education providers make, especially during busier time periods. Spending a few hours diving into your financial data will make all the difference when it comes to formulating the strategic planning needed to improve this data. Visibility into the health of your financial data is the key to taking control and gaining a clear understanding of your current performance.
Of course, if your current financial systems are disorganised, with spreadsheets and documents scattered across folders and departments, accessing the data that you need can be time-consuming and stressful, quickly turning it into a task that team members would rather avoid. A simple solution is centralising all your financial documents and data in one easily accessible location. A great example of this would be upgrading your financial systems to a modernised accounting software like Sage Intacct for Education. With this advanced cloud-based accounting software, MATs can centralise all their financial data in one easy to reach location and make use of customised dashboards that allow users to view only the data they need in user-friendly graphs.
- Identify your biggest time-consumers
Once you have a firm grasp on where your financial data stands and have centralised your data in a system that is easy to access, you’ll be in a better position to start optimising the processes that might be holding back your financial growth. A great place to start is to work out what your biggest time and energy consumers are and find a way to streamline them. If you’re not too sure how to identify the time-consuming tasks, you can ask your team to roughly log how much time they are spending on certain tasks. Often, financial teams get tied up in undertaking day to day tactical tasks, leaving them very little time and energy left to focus on strategy and future planning.
By streamlining and automating time-consuming tactical activities, you can free up your team’s time, resources, and energy to focus on formulating higher-level strategies to boost future financial success. A prime example of this would be identifying tactical tasks that require manual data entry and automating these processes. Not only is manual data entry time-consuming and tedious, it’s also one of the biggest culprits of human error which can cause issues with reporting and compliance. Investing in an accounting software that offers automation tools will help your MAT to eliminate the need for manual data entry altogether, improving efficiency, reducing errors, and freeing up your team’s time and energy to focus on the strategy required for financial growth. In fact, Sage Intacct reports that customers see a return on investment in just 6 months after investing in their accounting and automation tools.
- Identify risks in real-time
Now that you fully understand your data and have optimised and automated any processes that were holding you back, your MAT is in a stronger position to start working towards improving financial performance. A good jumping off point to begin looking for ways to boost performance is to take a deep dive into your financial insights to identify any potential risks early.
Why is it important to regularly review your insights? Knowing exactly where you stand in relation to budgets and actuals gives you the ability to spot any risks before they develop into wider problems that might damage your financial health. For this reason, accounting software that features real-time insights are pivotal tools for education providers looking to improve their financial performance. Real-time insights ensure that data remains up to date and report-ready at all times and allows MATs to easily compare their budgets to actuals and identify areas of both over and underspending. A good example of this would be using real-time data to monitor departmental spend and spot potential problems early in order to know where to focus time and resources. Identifying risks like over-spending early with real-time visibility gives MATs the time and resources they need for strategic responsiveness.
- Regularly evaluate and report on performance
Once you have taken control of your data, optimised your financial processes, and identified areas of risk and opportunity, you’ve got all the ‘hard’ parts out of the way. The final step is to evaluate, review, and report on your performance. While this is something that your MAT is almost certainly doing for auditors already, it’s essential that you ensure that you’re doing this regularly and consistently enough to meet your own goals, not just your auditor’s demands. Regularly evaluating and reporting on your financial performance ensures that you are consistently meeting budgets, improves the accuracy of your data, and boosts compliance when it comes to feeding back to governors and auditors.
Again, real-time data is your best friend when it comes to evaluating your financial health, reporting on risks, and comparing actuals to budgets. Real-time capabilities even allow you to compile accurate reports at the click of a button, making the reporting process consistent and stress-free. To take your financial data and performance to the next level, accounting software that features advanced reporting capabilities like dimension tagging can allow you to dissect your data at a granular level for an even deeper understanding. With user-friendly multi-dimensional reports and real-time analytics, you can see exactly which areas you need to improve on, giving you the visibility and insight needed to make the data-driven decisions that drive financial growth and success.
While improving financial performance has become more important than ever to education providers facing the financial challenges of 2024, it doesn’t have to be a time-consuming and painful series of excel nightmares. Following this simple 4 step process will ensure that your MAT has the visibility, time, and resources needed to improve financial performance:
- Understand and centralise your data
- Identify and automate time-consuming processes
- Minimise risks and maximise growth opportunities
- Evaluate and report on performance at regular intervals
Remember that this process is not a one-stop shop for financial growth and should be regularly repeated to ensure that your MAT continues to grow alongside the changing demands of the education sector. Investing in modern accounting software like Sage Intacct for Education, will help you run each step of this process seamlessly and provide you with the automation tools, real-time insights, and multi-dimensional reports needed to drive financial success and generate a return on investment in just six months.