It’s very important to have efficient and productive accounting in most organizations, but especially so in the case of educational institutions. At its core, proper accounting tracks the financial performance of the school or university, while also providing a bigger picture of the incoming and outgoing financial transactions for the entire institution.
There are many elements involved in fully accounting for all the finances when it comes to educational institutions. Thankfully there are existing payment solutions for educational institutions including both for-profit and non-profit institutions that can eliminate a lot of the hardships involved when it comes to accounting in educational institutions.
Standard Accounting Procedures in Educational Institutions
Regardless of the educational institution, some standard accounting practices are instrumental in managing the finances of the institution. Schools and universities must manage some of the same financial interactions as other organizations, but also have some unique procedures exclusive to them as well.
Educational institutions often seek to ensure financial transparency, accountability, and compliance with certain regulatory requirements. Like most forms of accounting, these procedures typically match up with other generally accepted accounting principles, also known as GAAP. This provides a foundational framework to maintain the consistency and reliability required for financial reporting in a school or university.
Tuition Revenue
For most educational institutions, tuition revenue is a major source of income, and in some cases the primary source. Proper accounting in regards to tuition revenue will keep track of student tuition including deferred payments, installment or payment plans, and tracking increasing or decreasing tuition rates accordingly.
In most cases, tuition revenue is calculated on an annual or per-semester basis, often with a per credit hour breakdown. Using this example, a university that charges a $30,000 annual tuition would constitute a monthly tuition revenue of $2,500, following a basic monthly installment plan. This allows the educational institution to see an annual big-picture revenue picture without burdening students with a massive upfront bill.
Government Grant and Assistance
There are grants and government assistance programs in place for many educational institutions on both the federal and state level. In most cases, you will need to follow certain federal, state, and local guidelines and compliance regulations in order to maintain access to such assistance. It’s often part of the educational institution’s accounting procedures to maintain such reporting.
When accounting for an educational institution, it’s important to manage cost allocations and revenue from grants for the school but also individually for students. You’ll need to prepare and generate proper financial reports for grantors, auditors, and students.
Endowment Funds
Some schools and universities have long-term investments in endowment funds, with the primary purpose of generating income and supporting the overall goals of the institution. The funds are typically composed of gifts and donations that are invested into various funds that generate sustainable streams of income that evolve over time.
While endowment funds can be complex, the overall process is often more streamlined when proper accounting is in place for the educational institution. These practices often include preserving the principal balance of the fund, creating and tracking income generation streams and strategies, monitoring spending policies, and adhering to any ethical considerations when choosing where to distribute funds.
How Payment Solutions Can Support Educational Institution Accounting
With so many unique and challenging aspects of accounting for schools and universities, many use the assistance of specialized payment solutions to handle most of the accounting-related tasks for their educational institution. In fact, when using a professional payment solution like Paysley, you’ll get access to a suite of tools and resources that streamlines every aspect of the accounting process for your educational institution. Here are just some of the educational services Paysley provides:
- Comprehensive payment solution for handling tuition, donations, fundraising, and more.
- Secure and user-friendly payment processing platform.
- Flexible payment options for in-person and online transactions and transfers.
- Detailed invoicing and reporting to track all incoming and outgoing payments.
- Recurring payments for extended outreach like alumni and outside supporters.
- All-in-one payment processor for other services like concession stands and other POS facing events.
The great thing about going with a professional service like Paysley that knows the industry of educational services is that you’ll have a peace of mind knowing that any accounting or payment solution situation that should arise, Paysley has an option for.
While other payment solutions may exist, many don’t offer the complete arsenal of tools that you receive when using Paysley. As such, you may be able to handle some situations, but you will often require a secondary solution for specific situations, which can be tedious and troublesome in the fast-paced environment of an educational institution.
Benefits of Using a Specialized Payment Solution
There are many benefits to using a specialized payment solution, which makes it worth considering for any educational institution. With no-hassle Pay-As-You-Go pricing at an affordable price, Paysley quickly pays for itself once you factor in reduced labor costs associated with accounting as well as reduced costs associated with payment processing.
Also, with improved efficiency due to a more accelerated transaction process and faster payments, you can rest assured that students and other types of customers will be much more satisfied with more streamlined transactions.
With real-time data analytics and insights into your overall financial performance, you’ll be able to make more strategic and informed decisions that will in turn affect the financial stability of your educational institution. This information can help with making risk management decisions for your school or university as well as maintain further compliance with detailed financial reporting.
In the end, setting up a proper accounting infrastructure for your educational institution is essential. Doing so will help your institution with its financial goals while also adhering to the standard federal, state, and local laws and regulations that are required. You don’t have to start that journey alone thanks to the incredibly robust and intuitive payment solutions offered by Paysley.
