The Future of School Finance: Collaborative Accounting in the Cloud
A recent report from PwC and the ACCA suggests that a ‘key lesson from the pandemic will be how truly transformative a lot of organisations have been digitally’, that Covid-19 has ‘exposed for some whether they have been able to respond adequately because they lack the data and insight to support the necessary rapid decision-making.’
For many schools, the first wave of the coronavirus pandemic brought about an unplanned digital revolution. Teaching and learning were quickly ported to digital classroom solutions and VLE’s, whilst school communications between staff and parents shifted away from staffrooms, school gates and letters in backpacks to email, SMS and Microsoft Teams.
Digital solutions to these problems have been readily adopted, but for some school finance teams this transition was less simple, as legacy accountancy systems prevented staff from accessing vital data from home – in real time – in order to model for the uncertainty caused by the pandemic.
Those schools with a cloud-based accountancy system, like iFinance by iSAMS, were notably better placed to continue working collaboratively with their colleagues and audit partners alike. In this post, we examine the concept of collaborative accounting, the benefits it provides to school finance teams and management and the necessity of a cloud-based accounting system to this method of working.
- Collaborative Accounting
- Work Together in Real Time
- Collaborate Remotely
- Cloud Versus Legacy Systems
Schools rely on external audit partners to provide an independent opinion on the integrity of a school’s financial statements. In the wake of the pandemic this relationship will likely be more important than ever in assessing the financial stability of schools and modelling for any fallout.
This process can, however, be time-consuming and expensive for schools if the firm’s team need to work on site for the duration of the audit. Moreover, if audit partners are unable to access school sites for the foreseeable future and are instead forced to rely on email exchanges to complete their work, the process is likely to be slow, laborious and prevent school finance teams from concentrating on providing governors and shareholders with management advice.
Advancements in cloud technology, however, have brought about a new method of working between schools and their audit partners, known as collaborative accounting. This model enables firms and schools to work together on projects in real time without the need for in-person contact, promoting a faster and vastly more efficient means of working, but many schools lack the digital infrastructure to benefit from these practices.
Collaborative accounting, with a true cloud solution as an intermediate between school and audit partner, allows both parties to access the information they need in real time. This helps to speed up the accounts preparation process, improving efficiency and providing more detailed information. The faster a school can have their financial statements prepared, the sooner they can understand how the school has performed financially and move towards forecast preparation.
Less time taken preparing accounts also allows for the accountant able to spend more time on understanding the school’s business model and providing insightful advice. Access to the information online also means that this advice is based on real-time information.
Real time remote access to financial information encourages greater collaboration between schools and their advisors, leading to better governance. KPIs can be highlighted and tracked by all parties via an intuitive, user-friendly dashboard.
The outbreak of coronavirus laid bare the advantages of a cloud-based accounting system. Not only were school finance teams able to continue working from home and keep schools functioning, they were also able to communicate effectively with their audit partners and – in groups of schools – other colleagues.
For groups of schools spread internationally, cloud-based accounting software can facilitate a faster and more efficient auditing process as the need for local accountancy firms to be appointed in each region is minimised. Audit partners can control the process remotely from the country in which a school group’s head office is based, tailoring a solution such as iFinance to local regulations and currencies.
Schools using older accountancy software are often slowed down by repetitive manual processes such as inputting paper-based invoices and purchase orders – processes that are at risk of human error. This, in turn, can result in a slow and onerous audit process.
Cloud-based accountancy systems such as iFinance, in contrast, offer paperless document storage and sharing meaning audit partners can access the documents and data they need instantaneously and deliver feedback via secure portals.
Many cloud-based accountancy systems also offer mobile apps to allow staff to approve purchase orders and invoices on the go in an easily digestible format, rather than pouring over email requests. Staff can also approve or edit payment runs remotely. A full audit trail of transactions is automatically maintained in the cloud and can be accessed by both school finance teams and audit partners.
The primary benefit of collaborative accounting in the cloud is undoubtedly greater efficiency; through the automation of previously manual processes, faster access to – and sharing of – information between schools and accountancy partners, and intelligent real time reporting. This allows schools to provide objective insight to the school management, so they can see whether their directives are being achieved or not and adjust practices accordingly.
With budgets under additional scrutiny in the wake of Covid-19, legacy accounting systems are being shown to be expensive to implement, maintain, upgrade and scale as school organisations grow. Cloud software, by contrast, is inexpensive to implement, straightforward to upgrade and can be remotely rolled out in new locations as needed.
To find out more about how iFinance can empower collaborative accounting in your school, please get in touch and we’d be delighted to help.