No one likes a group project, but some undertakings require significant collaboration if you want them done right. Like your K–12 private school budget.
A well-crafted budget is essential for aligning financial resources with the strategic goals of your private school, and with the right processes and tools, it doesn’t have to be stressful.
The Purpose of a Budget for Your K-12 Private School
Your budget is the guiding financial document for your school. It sets in motion the goals you’ve outlined in your strategic plan. A well-structured budget with accurate data from across your school ensures that your spending throughout the year matches your goals and prepares you for the future.
Your school may have multiple budgets, each with a different purpose.
- Operating Budget: Your operating budget outlines the day-to-day costs of running your school. It includes salaries, materials, utility costs, and student services.
- Capital Budget: A capital budget focuses on long-term projects, such as new buildings or significant renovations. Because these projects happen over multiple years, the capital budget needs to cleanly pick up from last year’s progress and feed into the next year.
- Program-Specific Budget: Department and program-specific budgets give groups within your school, such as your athletic teams, theater department, and robotics club, the insight they need to make decisions. These budgets incorporate the funds they collect as well as income provided by the larger school budget.
- Restricted Project Budget: Your school may have a budget specifically for a restricted set of funds. For example, you may have received a grant to start a school garden, so all expenses must be accurately tracked to verify that funds from that grant were only used to buy supplies for the garden.
Creating and managing accurate budgets requires collaboration and buy-in to make sure everything is accounted for. And for many K–12 private schools, the process of pulling all that information together can feel like herding cats.
Why Budgeting for Your K–12 Private School is Hard
A good private school budget requires transparency, time, and input from a variety stakeholders—many of whom are also teaching classes, coaching teams, and managing performances.
Part of what makes the budgeting process so time-consuming is the number of stakeholders involved. Departments, athletic programs, clubs, leadership, and the board all have unique needs and priorities, making it hard to align everyone’s expectations without overlooking an important priority.
Adding to the complexity is the fact that everyone is incredibly busy. In private schools, staff often wear many hats, juggling responsibilities beyond their primary roles—the biology teacher also coaches cross country, and your IT director runs the debate team. Budget submissions can fall by the wayside when competing with midterms and parent conferences, causing delays and incomplete data.
Then there’s the Excel spreadsheet challenge. Many schools rely on spreadsheets for managing budgets, which makes it difficult to track the most up-to-date version. This approach is prone to errors, miscommunications, and wasted effort, particularly when multiple versions of files are being emailed back and forth or updated by various people.
Many schools may not have clear insight into last year’s performance and next year’s forecast. Without this information, it’s tough to make informed decisions or adjust for potential changes in revenue and expenses.
The diversity of income streams adds another layer of complexity. Tuition, fees, donations, grants, endowments, and events all need to be accounted for accurately. On top of that, you have to manage the mix of restricted and unrestricted funding, each with its own rules and limitations.
Finally, external factors like enrollment changes or new policies can drastically impact your school’s financial outlook, creating more uncertainty in an already challenging process.
Tips for Taking the Stress Out of Your K–12 Private School Budget
With the right systems and processes in place, you can streamline your budgeting process and save significant time—and headache. Here are seven tips to make the budgeting process easier for your private school.
1. Pull Your Data into Dashboards
Create a dashboard with your actuals from the previous three to five years. These charts make it easier to understand trends, such as increased transportation costs. Share these dashboards with key stakeholders or create view-only access so they can access the information as they are putting together their specific budget recommendation.
2. Don’t Start from Scratch
While you don’t want to copy and paste from last year’s budget, this is a great time to review where you were over and under budget. Know what is in the strategic plan to re-evaluate, such as upgrading your HVAC system to decrease maintenance costs. Look at what needed to be recast throughout the year and why, so you can make those adjustments proactively.
3. Stay Informed on Broader Trends
Gather information from conferences, associations, board members, and staff on what’s happening locally, among your peer group, and nationally that could affect your revenue and expenses. Understanding the need to meet new privacy requirements based on evolving technology, for example, can help you plan better.
4. Create or Update your Documented Budget Process
Make sure your documented budgeting processes are up to date with the correct people, tools, and expected timelines. For example, your process should outline the template your departments should use, explaining that the formatting makes it easier to upload to your fund accounting system. Provide easy access to your documented process so everyone can refer to it throughout the budget season.
5. Create or update your budget change request form for new projects
If you have great faculty and a culture of innovation within your school, you will likely receive a number of requests for new projects every year. Some you can work into the budget, and some may have to wait for a different fiscal period. Review (or create) your budget request form to make sure it asks for the information you need so you can easily prioritize based on your goals and available resources. Also see if there is a way to bring those requests directly into your fund accounting system using a tool like Microsoft’s Power Automate.
6. Have a single source of truth
The budgeting process requires a lot of iteration and collaboration. But it’s important to have one place where all the final budgets live and where there are internal controls over what can be changed. While your team will likely use spreadsheets to draft their budgets, create a single source of truth in your fund accounting system for finalized and approved budgets so everyone knows they are working from the correct version.
7. Use your tuition management system as a subledger for accurate data
Integration between your tuition management system and your fund accounting software improves the accuracy of your data by eliminating manual data entry. When these two systems work together, you can be confident your tuition history is accurately reflected so you can forecast and budget better.
How Fund Accounting Software Helps Simplify Budgeting for Your K-12 Private School
While an accounting system won’t help you rein in your history chair who never turns in their budget on time, the right technology can alleviate much of the stress around your budget process. A fund accounting system like Blackbaud Financial Edge NXT® that allows you to budget by department gives you the tools and details you need to create an accurate budget for your entire school.
With an Excel add-in, your department heads and school leadership don’t need to learn a new tool just to do their budget. You can easily export templates based on their budget last year and upload their new versions directly into the system.
The system makes it easy to budget by individual program, grant, or department so no one will ever have to start their budget from scratch. And you can let the system do the distribution for you without worrying if the formulas are correct. You can have the system evenly distribute an expense across the year, by percentage, or adjust the cost based on quarter.
Financial Edge NXT also allows you to create scenarios so you can see how potential changes in enrollment or how adding a new project will affect the overall budget. Integration with Blackbaud Tuition Management
helps you to be confident your tuition data is accurate and up to date as you work through your budget process.
Ready to see how a fund accounting system built for K–12 private schools and other nonprofit organizations can simply your budget process? Check out our on-demand webinar, 10 Ways Blackbaud Makes Budgeting Easier.
Free Resource
How Silos and Redundancies Impact Financial Sustainability in K–12 Schools
The post Take the Stress Out of Budgeting for Your K–12 Private School first appeared on The ENGAGE Blog by Blackbaud.
