2003-10 - Contemporary SCHAR Matters - ZZeod


TOPIC A Contemporary SCHAR Method                                                                      ORIGINATED:    February 2010

****After March 2013 ---- Be sure and grasp the following re Online SCHAR:    http://www.bcidot.org/fwi/0944-13.html  ******

OVERVIEW:  Discussion with a Christian School Board member (the Onliner below) about some needed improvements in the management of their computerized "School Accounts Receivable  (SCHAR)"  system.  This includes a prospective "SCHAR PLASTIC"  contemporary way of managing such a system.

FILE: 2003-10                                                                                                                                    UPTDApril 15, 2013

  FROM:  Onliner

       As found when I go Here  Here  and Here  thank you for the information on your website about finances at a Christian School, Jim.  I serve on the Board of a Christian School and our computerized accounting software is inadequate -  especially the "School Accounts Receivable" system.   I have been looking at QuickBooks (QBs) and Peachtree.   Am I asking too much for such a system to provide the following?   

   1>>   System must be able to handle different tuition billings, i.e. monthly, 9 periods etc. 
   2>>    For parents paying this way it must be able to do progressive billing
   3>>    Matching of revenue earned to revenue billed is very important. My thoughts are to have accounts similar to this: Accounts Receivable-(Book full year tuition) $XXXXX Unearned Tuition Income $XXXXX .
   4>>.   Recognize Tuition Income over the school year Unearned Tuition Income $XXXXXXX and Tuition Income $XXXXX.
   5.>>   Show parents on their statements their remainder of year Accounts Receivable and the amount they currently owe under their payment plan. 
   6>>    I don't know if QB and Peachtree can handle this efficiently.
   7>>    I also want my aged A/R not to be commingled with credit balances which look like prepaid tuition. I only want to see aging based on tuition payment plan. 
   8>>    I would like everything automated and be able to tie out the Unearned or Prepaid Tuition liability by family.

                           FROM:  Retired Auditor CPA Jim Bramer                        

      What you are asking for is pretty much what Schools need as they manage their School Accounts Receivable -  SCHAR.   Below is another view of what a SCHAR system should provide:
    a>  Timely report/provide operational money so the School can pay its bills, etc.
    b>  Make full use of meaningful Internet/computer SCHAR resources and tools.
    c>   Which provides "Aged Account Receivable" information for needed amount due follow-up.
    d>  Efficiently register at beginning of semester -- do this Online as much as possible.
    e>  Provide accurate/complete SCHAR information to the Parent (or person paying SCHAR).
    f>   Make it as easy as possible for the Parent to pay their bill;  provide Plastic resources.
    g>   Contribute to a student staying in School;  no student is asked to leave because SCHAR is not paid.
    h>  Have a monthly Income reporting emphasis; not deal with prepaid accounting income issues.
    j>   The School NOT function as would a money lending endeavor.
 FROM:  Onliner

      Very good ----  how would you go about accomplishing all of this,  Jim?
                       FROM:  Jim Bramer                    
     First, let me acquaint you with some contemporary SCHAR matters mentioned within the editorial when you go Here.   There you will notice that usually the Parent is the "SCHAR PAYER"  but this person could be any one  who assumes the responsibility for these payments.- including post High School students. 
     In addition to some of these ideas, I would like to see a School use the following SCHAR method:
>>   The "SCHAR PAYER" has ONLY a monthly SCHAR relationship.  The School will not allow any prepayments for the entire year or semester.   This way the inflow is for the current month only and there is no need to do any accounting  for any prepaids or unearned income, etc.  You will also notice below how the amount due is always paid on time ---  or there is no unpaid amount balances or a need for an "Aged SCHAR" reporting system.
>>   All "SCHAR PAYERs"  are part of what I will call a "SCHAR PLASTIC" system that includes the following:
  --  The preference is for the School to use this "SCHAR PLASTIC" system, via the Debit Card process, (I like to call this an "eCheck")  to write a "SCHAR PAYER" check equivalent for the said monthly amount.  You will note that this payment action is by the School ---- not by the "SCHAR PAYER."  Of course, the School has all the needed Plastic information to enable this "SCHAR PLASTIC" system.
  --  But the alternative is for the School to accommodate the "SCHAR PAYER" and add the monthly amount to their Credit Card balance.  If they make this choice, the "SCHAR PAYER" would agree to timely pay off their Plastic balance --- or the "SCHAR PAYER" would not have unpaid debt problem, etc.  Some Schools would have the "SCHAR PAYER" sign a vow along these lines. Please go Here  for an example.
--  The Credit Card Company deals with any late or delinquent SCHAR payment issues, if there is any.  This enables the School administrative staff to concentrate on Christian School matters.
>>  So a required part of the registration process is for every "SCHAR PAYER"  to provide the School with the needed "SCHAR PLASTIC" information.  Some may prefer to have a unique "SCHAR PLASTIC" for only this "SCHAR PLASTIC" purpose.  Some Credit Unions like ECCU  could help provide this for applicable "SCHAR PAYERs" as part of the Semester Online registration process.
>>  Each semester the School would determine what the monthly  "SCHAR PLASTIC" amount would be.  Or it would total the amount for the semester's Tuition/Fees, less any Offsets/Scholarships, and come up with a monthly earned amount.
>>  This "SCHAR PLASTIC" monthly amount would then flow through the SCHAR computerized accounting system.  Here are some factors in doing this:
--  At the first of the semester the School enters this monthly amount all at one time using the "post dating"  process;  or you enter the monthly transactions now and post date them for the applicable upcoming  months, etc.
--   Or you post the monthly charge and the payment transaction at the same time --- almost like a cash sale flowing through the SCHAR system. 
--   Schools using QBs  would make full use of the Memorized batch entry feature whereby a transaction is saved (Memorized) and then it is re-dated with a large part of the transaction being posted over and over again.
--  Larger Schools will likely take such steps via a weekly batch process --- like 100 posting/depositing per week, etc.
>>  Of course, any additional School fees occurred during the year would be charged to the SCHAR system at the time and paid via this "SCHAR PLASTIC" as part of the monthly process.
>>   Most any integrated Accounts Receivable computerized system would accommodate this proposed "SCHAR PLASTIC" system,  but, as you probably have already noticed, my preference is the use of older versions of the QuickBooks (QBs) Pro system for use by most sized Ministries that can often be purchased for as little as $100.00.
 FROM:  Onliner

      Wow, such a
"SCHAR PLASTIC" system would meaningfully respond to a lot of my preferences mentioned above and reduce a number of my unique School Accounts Receivable management issues.   This "SCHAR PLASTIC" system is another example of using Plastic as a "TOOL" and not a "TYRANT".  Thank you for mentioning this.
      Do you have any other thoughts, Jim?

                          FROM:  Jim Bramer                    

       Yes ....  in addition to a School regularly doing  some "Self Exams" as per the examples when you go Here,  please also consider the following:            
    a>  You ask about such SCHAR matters at Online Forums like the following:
Church Administration ---- some have Schools:     http://groups.yahoo.com/group/churchadmin/
QuickBooks at Christian Ministries:     http://finance.groups.yahoo.com/group/qbunch/
    b>  You might obtain applicable SCHAR information from such groups as:
Assn of Christian School, Int:    http://www.acsi.org   or  Christian Credit Unions like:    http://www.eccu.org

 FROM:  Onliner

        Thanx, Jim .....  I will be in touch in the days ahead.

          As most of you know, at  www.bcidot.org   we dialog by email with Onliners regarding Ministry Finance (MinFin) matters.  Above is what we call a "Edited Onliner Dialog", or edited versions of actual dialogs with some of you;  but we have honored your privacy and not used your name or that of your Ministry.  Our purpose is to make topical MinFin  information available to any interested  Ministry Finance Team  so we all can learn from these perspectives.   Thanx - Jim Bramer, Retired Auditor-CPA  - Proverbs  9:10.   Jim@bcidot.org