TO: All Interested Onliners FROM: Jim Bramer. Retired Auditor-CPA
RE: Contemporary Management of Christian
School Account Receivable (SCHAR) Originated: June 2009
Today's "FOR WHAT IT IS WORTH" editorial
Private Christian Schools are primarily funded by sums paid by DAD-MOM (or the applicable guardians - maybe by students themselves who are going to colleges and beyond) for Tuition/Fees/Room Board, etc. We reference such matters as "School Account Receivable -- SCHAR" which, of course, covers all such transactions including any scholarships.
After March 2013 I also wrote the editorial at: http://www.bcidot.org/fwi/0944-13.html about "Online SCHAR" which I recommended that you take the time to digest.
In order for such a school to function it must have SCHAR management policies that cover all parts of this vitally important area. In general, it is best for the School administrative staff to concentrate on academic matters and NOT on SCHAR loan management issues, etc. You might find the SCHAR links appearing HERE and HERE of interest on this overall topic. Please also note the WebBOOK along these lines when you GO HERE; please note the following:
CONTEMPORARY SCHAR MANAGEMENT
>> All semester Tuition/Fees/Room/Board charges; less Scholarships and "Received on Account - ROA" monies flows through the School's SCHAR account. Some Schools have a SCHAR account. for each DAD-MOM and others by the named Student..
>> The SCHAR unpaid balance is due and payable at the time of semester registration.
>> The School is NOT a lending agency whereby DAD-MOM is charged financing fees (or Interest) by the School and DAD-MOM then deals with the School as to any future promised payments.
>> The School does NOT want to get involved if DAD-MOM do NOT make their SCHAR monthly payments as promised, etc. Especially if they have to remove the student from School for some related reason, etc.
>> Of course, the entire registration and SCHAR balance settlement process can be done Online remotely via the use of Plastic resources; ideally via Debit Cards as this is the same as if DAD-MOM writes a check to the school.
1> As needed, DAD-MOM borrow from their own resources ---
--- So that they can pay the entire SCHAR balance to the School at the time of semester registration.
--- Or it is possible for them to become members of the School's Credit Union (something like ECCU)
--- So they borrow therefrom, perhaps, as part of the registration process. In fact, the School could function Online almost as if they were a Credit Union loan official, etc.
2> Or Schools makes use of this possible SCHAR financing resource ---- the Christian School is part of a Internet Friendly endeavor by combined groups like ACSI and ECCU who function as if it is the individual Christian School. Ask me at Jim@bcidot.org for more details.
Any possible extra-circular fees due from any special classes during the upcoming school year are mostly determined and paid for at the time of registration. But If such fees show up afterwards then they are to be paid now as they flow through SCHAR.
IN GENERAL --- the School administrative staff can now concentrate on academic matters and NOT on seeing that monthly SCHAR amounts are paid as agreed, etc.
SCHOOL SPENDING CONTROL MANAGEMENT SYSTEM
Via this "pay at the beginning of the Semester" SCHAR system the School is receiving money that has not yet been earned. Let's say the semester mentioned above starts in September and goes through December ---- four months..
>> As set forth when you GO HERE, the school use QuickBooks Pro (QBs) and pools all the Bank deposits for Sweep purposes. The School will have money in the bank that it has not yet been earned, but it MUST earn "Interest Income".
>> The School uses the BuxBox SPENDING CONTROL system --- GO HERE for more details. Or the School follows the rules that a School buyer can spend only when a BuxBox has a balance, etc.
>> Or just because the School has a balance in the Bank does NOT mean that it is available to be spent at this time, etc. Please GO HERE and digest "why" you have money and NOT "where" is it etc
Let's suppose that after the above SCHAR semester process the School has generated a net revenue of $360,000 for the following four months as shown below, or some 17 weeks. The $360,000 applicable to the entire semester flows into a separate QB Liability account named " Deferred Net Income"
I T E M
Tuition - Fees - Room-Board
The School then sets up individual QB Equity accounts as BuxBoxes for the following " SPENDING CONTROL" groups-
-- Salaries and Benefits - probably a fixed amount
-- Facility - mostly fixed
-- Debt Servicing - probably a fixed amount
-- A number of named operating departments
The School sets up types of Income and Expense accounts via the QB Class feature for:
--- Tuition Income
` ` --- Named Fee Income
--- Room and Board Income
--- Scholarship Expenses by type, etc.
Then over the above 17 weeks, or the four month period of time, the School weekly uses the QB memorized journal entry feature to move the unearned $360,000 from the "Deferred Net Income" liability account into the above BuxBoxes - plus you record earned income and timed expenses into the applicable QB Class accounts.
This "Spending Control" system then allows the School Buyers during this four month period of time to know each week whether or not they have earned money to spend in their respective "Spending Control" group, etc. Ideally each week they get reports that answer this question: "Do I have money to spend in my area during the next week?"
Please contact JIm@bcidot.org if you have any questions about any of this.
K E E P L O O K I N G U P !!
Click here for a list of of our "For What it is Worth" Editorials or Online documents.
UPTD: April 15, 2013
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