Planning and Managing Finances for Schools is a crucial topic to help understand how to manage collected school fees to develop and grow your school.
Financial management is:-
• Planning
• Organization and
• Control of the school’s financial activities
The financial management of a school can be defined as:
The management of finances in order to achieves the school’s financial objectives
Financial Management Objectives
The key objectives of a school’s financial manager would be to;
a) to maximize profitability
b) to maximize the use of available resources
c) to create wealth for the share holders
d) to provide an adequate return on investment
e) to grow the school from a small institution to a bigger one
f) to improve the students learning environment
g) to improve academic performance
Two types of school finance objectives:
a) Primary objective - maximize return of the capital (profit.)
b) Secondary objectives - Basic use of resources
- Healthy liquidity position
- Effective cash management
- Effective budget system
- Grow in the business
The 3 key elements to success in financial management are;
1. Financial Planning –
to ensure that the school is able to meet it’s short and long term financial obligations on time. Short term obligations may include payment of recurring bills such as staff salaries while long term obligations may include purchase of fixed assets such as land and vehicles.
2. Financial Control –
to ensure that resources are being allocated and used efficiently to avoid wastage. Proper money control also ensures that the school’s assets are secure.
3. Proper financial Decision Making –
How will crucial investments be funded? How will profits be managed?
The next article shall discuss Working Capital for schools
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Steve is the founder of Wisdom Nest Community Education Programme - a needy slum children learning center. You can help him buy school land by clicking here to donate.
