Brought to account

Choosing the right accounts/accounting package can be a daunting process. Clive Gutteridge, bursar of Appleford School in Wiltshire, outlines the key attributes to look for and reveals his preferred software package

Before buying a software package, a key decision to take is whether to buy a whole school administration software package (including an accounts sub-package), or a specialist finance package (which may or may not be linked to a school admin software package). I have used both – each has its pros and cons.

I use Sage Line 50 linked to Sage Payroll software because it is one of the best accounts package on the market; inexpensive to buy, has a reasonable annual maintenance contract; training is easily available at the local tech college and audit fees are reduced because the data can be transferred to the auditors electronically.

What your software package should do:

• it should be easy to use in a windows-type environment. The Purchase Ledger should only use one set of key strokes for every transaction. It should be easy to drill down to find out how much has been spent each month by nominal code and/or sub code (department);

• the Purchase Ledger should be linked to the Nominal Ledger. (The prepayment and accruals facility within the Purchase Ledger can also be used as part of a commitment accounting system to show the prepayments and accruals for buildings maintenance etc). It is also advisable to purchase cheque-writing software as part of the package, but this needs careful supervision (just as cheque books do now);

• easy handling of extras in the Sales (Fees) Ledger. Newer versions of software such as Sage make this easier, with a products list which you set up yourself, or you can buy a disbursements add-on which I would recommend for larger (500+) schools;

• easy supervision of Aged Debtors (an important area for cashflow management); also the facility to create linked letters for fee chasing will make the bad debt controller’s job easier;

• simplified bank reconciliations. It should also be easy to run off and distribute departmental reports to keep budget-holders up-to-date (and on their toes!);

• easy entry of budget information: you will want to send information on a regular basis to the departmental budget-holders on how much they have spent over a given period. Not only should agreed budgets be easy to input onto the system, reports should be easy to customise – so they look how you want them to. (At Appleford, I had to modify the inherited systems and now I produce a half-termly report for budgetholders on their actual spend against forecast. In our monthly management accounts we have divided the termly income into monthly amounts. When monthly prepayments and accruals have been input, this allows me to show exactly how much surplus we have made that month); and

• the monthly variance reports should allow comparison with the previous year. I often comment in my management accounts overview letter to the directors (governors) on current year vs prior year performance.

Set up well
It is also worth remembering that it is important to set up the chart of accounts carefully. (One school I visited recently had set up an individual nominal code for each departmental budget, which meant that the nominal ledger account list covered four pages of A4 – our list fits on one page!).

You should run your Profit and Loss and Balance Sheet off every month and check them carefully. (As we also run a multi-company package for our two trading companies I am able to check that the companies cross-balance correctly at that point).

What if your package doesn’t do what it is supposed to? Work out how many working hours are being wasted every year on manual preparation of accounts, budgets, fees collection etc and cost them out. If it comes to more than £1,000, change the package. If it is more than £5,000, change it fast!

Clive Gutteridge has ten years’ experience as a bursar in independent schools. He has been a Recognised Advisor (Inspector) working with the Independent Schools’ Inspectorate for four years. Clive can be contacted on bursar@appleford.wilts.sch.uk

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