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                           TO:  Interested School Ministries                                                                                        FROM: Jim Bramer, Retired CPA-Auditor
                                                                                                                                                                                 FILE: 7010-01/Schar

                            RE:  Schar TRUISMs                                                                                                              UPTD: May 02, 2008                                  

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     To manage this extremely important "next to cash" School Accounts Receivable (Schar) asset, we recommend the "Seven Schar TRUISMS" shown below. We are even convinced that the over-all fiscal health of the School revolves around Schar Stewardship.  

       --- Seven Schar TRUISMS ---

1> For complete Schar and related Income knowledge, the School should report Tuition and/or Fee Income when earned; or the School is on the Accrual basis rather  than Cash Basis of accounting.
2> It is vital for constant agreement of the G/Ledger Schar Control Account and the Subsidiary. This financial internal control feature means that the total reported amount owed (or prepaid) must ALWAYS agree with the detailed list of amount owed (or prepaid) individually by each (a) Parent. (3)
3> Some Parents get a discount and prepay a number of months, or even the entire year, in advance. Such prepayments result in handling money that is unearned, or there is a liability that must be regularly known by management.
4> Most Parents make monthly payments. What is owed to the School by the Parents MUST be fully monitored to insure that Parents make monthly payments as agreed.
5> In our judgment, It is more declarative to have two separate Schar control units ---see Subsidiary and Control Account system above.  One cares for the Prepaids by Parents and the other for the usual amounts due.  Having a separate Prepaid control unit allows the School to better track charges that happen throughout the year, since they are not commingled with the ongoing credit balance.  Plus management can more readily identify the unearned amount of tuition during the year -- see above.
6> If monthly payments are not paid when agreed, the School has loaned the Parent money and understood penalties (Late Charge fees - yea, Loan fees) are due. (6)
7> At the appropriate time, the Parents should no longer be borrowing money from the School, but they should borrow from some outside source. If this does not happen then the Student may have to be removed from school. (7)

    To best accomplish the above Seven Schar TRUISMs, we advocate the use of the accounting software known as QuickBooks (TM)(QB). We use the term qbSCHAR to indicate the School Accounts Receivable Schar portion of QB. We use the term ScharAge to identify the periodic report from QB which shows the age and amount yet unpaid per Parent. 

     Another way to "Schar Manage"  is to outsource such activity to such resources found in 7013. (1)

  

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            a) We use the generic term "Parents" for the entity owing money to the school. In Colleges the entity owing is often the Student; other entities that might assume payment responsibilities are:   Separated parent with another last name, step-Dad/Moms, Grandparents, etc.

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  Please  Click Here  and go to some additional "Schar" resources found here on this web site. This was UPTD: May 02, 2008

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        (1) An Online document, or WRIT (Writing), may be applicable to all Ministries, or it may be designed for just groups like: Evangelical Church, School, Missionary Agency or Organization, Christian Camp / Conference, or other named group.
        (2) WRIT formats include the perspective of   Jim@bcidot.org  via IOMs (Inter-Office Memos) to the Ministry Finance Team (MFTeam); THRDs, a hypothetical Online conversation with members of the MFTeam; GLEANINGS, or Scripture within context of the MFTeam; FWIW; A periodic editorial (For What it is Worth); TRUISM, or believed Ministry Finance principles; and via FAQ, response to Frequently Asked Questions

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