Accounting For Schools.. Everything You Should Know!!

In Cameroon, there are thousands of schools from days cares to universities. These schools are either private, owned by a church, a community or the government. From experience, I must say that this is the highest industry in Cameroon that produces almost no financial statement at the end of each academic or financial year. Schools are known for having bursars not accountants. Their primary and only job is to collect fee. Sometimes, salary payment is done by the school owner. It is not right.

leading a Session at C-Life

Some major reasons why schools do not produce complete accounting statements are because; they do not pay taxes, they are hardly ever regulated, they are mostly owned by individuals who have little or no knowledge about accounting and finance, they are owned by the state that hardly ever audits and so on.

Every school should have financial statements (Income statement, balance sheet and cash flow statement).After recording fees and expenses like most schools do, there should be comprehensive work done to produce financial statements. This is for the following reasons:

The school owners get better informed about the financial health of the school. It is not just about having a large number of students. It is about having the right number of students in particular classes that pay on time.

Issues like replacement expenses will be made a lot easy. For financial statements to be correctly presented, there should be depreciation of fixed assets. This is a great way of one day replacing assets with less stress.

Another very important aspect is automated school management systems. (Topic for another day)

Recommendations

Every school should have at least five sets of books well kept. For daily operations, there should be an income record (for fees, and other income) and another for expenses (salaries, maintenance and so on). For end of year works, there should be a comprehensive income statement, a balance sheet (stating clearly what the school has/owns and owes), a cash flow statement showing how much in cash actually came in and went out.

Every school should have an accountant that has accounting knowledge. This is so because schools often take people who know almost nothing about accounting and put in this position. The first recommendation will not make any sense if the accountant or bursar does not know accounting.

School owners should get more critical when it comes to finances. Make decisions relating to marginal costs and revenue. Generally ask these questions. What will it cost me to add another teacher? How many students do I need to adequately cover the cost? How many students or pupils do i need to make this amount of profits for the year? etc.

I hope this made things better for you. leave any thoughts and questions below.

Ngong George Fonyuy (Accountant, Auditor, Entrepreneur) 671982815, n.george@peotef.com