Importance of Financial Management in Educational Institutions

Financial management is one of the foundational activities to be performed in any organization, either it’s a school, hospital or whatever. This includes planning, organizing, directing, and controlling the finances in order to use it in an efficient and systematic manner. Financial management ensures better ways to implement financial aspects. If anything goes wrong, the team that controls the finance is in charge of resolving the cases.

An educational institution is a combination of different sectors; therefore, it must be supervised appropriately.  There are 3 key segments where an educational institution is interlinked to finance. These aspects tells the significance of financial management in any educational institution. They are as follows:-

1. Student Fees Management

The matters related to Student fees are a bit burdensome to manage. This includes the creation and calculation of the fees. The class of the student, sibling discounts, extra discounts, transportation fees, hostel fees, and many other elements are incorporated with this task. Nowadays, automated systems could make management error-free. The management is responsible for the payment performed by the student. If any of the children have missed settling the fees, they must be reminded to endow the money.

2. Staff Payroll Management:

Any educational institution is a group of people dealing with different sectors. It might be teachers, non-teaching staff, principals, administration, etc. This staff Payroll Management is complete management of staff salary, taxation calculation, special allowances, deductions, gross pay, net pay, etc. For each employee, the pay-slip might be different depending on their salary. This is being given each month without any single error. Before the calculation of the payment, groups are being formed by the HR of the institution. Employees are being grouped into those who have the same payroll structure, payment frequency, and LOP etc in order to make the calculation easier. Each group created is processed separately.

3. School Account Management:

Institutional account management is the very next aspect to be managed carefully. This is completely based on the finances of the institution. The institution might have a lot of financial needs apart from paying the employees. This is being met with a particular amount that is specially kept aside for institutional usage.

From the above mentioned key segments it’s pretty clear that the proper financial management is necessary in any educational institutions.

VBV & Associates, Trusted Chartered Accountants in Ernakulam (Kochi), Kerala provides Audit and consulting services all over India, GCC and Africa for all types of businesses or firms. Visit our website or reach us for more details.