Education

Many private preK-12 schools run on legacy accounting systems. These often involve a combination of older software and spreadsheets and have often been in place for decades. But are those systems still worth the hassle? Increasingly, no. Keep reading to learn more about the major accounting challenges schools face as a result of their existing systems, plus what to do about them. How are legacy accounting systems causing problems for private schools? Legacy accounting systems provide several major challenges for school administrators. Among other issues, administrators struggle with cumbersome reporting, limited integration and a heavy back-office workload. Slow and cumbersome reporting: It’s hard to actually extract information from legacy systems and turn it into a user-friendly, digestible report. If you’re using older software, you might have to manually pull data from the system and put it into a spreadsheet before you can even start doing any analysis. Poor integration: Legacy software doesn’t play nice with other systems. You’ll have a hard time integrating donor, tuition management, or even bank feed systems into your legacy accounting system, leaving your team fumbling for workarounds. Heavy workload: Your team is spending many hours a month on manual processes that newer systems could automate. This generates burnout and also keeps your team members from focusing on more interesting, higher-value work. Poor visibility: Slow reporting means that school leaders have little to no real-time visibility on your school’s financials. This limits your strategic decision-making capabilities. Limited support: Aging software systems are probably not getting updated or patched with any regularity, if at all, creating operational and security challenges . You’ll also have a harder time finding IT professionals trained on supporting those systems. Disorganized information storage: Legacy systems typically store information piecemeal — scattered between software and spreadsheets. This gets messy even in the best of times, but becomes even more challenging if a team member departs, as vital data often gets lost in the transition. Difficult onboarding for new team members: Bringing on new people to your team is harder because legacy systems often rely heavily on the working knowledge of existing team members rather than SOPs. Younger employees may also strongly prefer to work with newer systems, creating a recruiting challenge as well. How does migrating to a cloud-based ERP help private schools? Migrating to a modern, cloud-based enterprise resource planning (ERP) platform will help your school solve the challenges caused by a legacy accounting system. An ERP essentially allows your whole administrative team to operate more efficiently and effectively, automate cumbersome tasks through AI and make smarter strategic decisions. School leaders considering an ERP transition should consider specific benefits like: Time saving You’ll be able to automate data collection and reporting, eliminating slow, manual tasks. This will free up a significant amount of time that your team can then put towards higher-level work. Clearer visibility A modern ERP gives you access to dashboards showing real-time financial data. This allows your leadership team to have a much clearer sense of what’s going on to facilitate smarter decisions and manage costs . Faster collections Modern systems make it easier to collect tuition. You can track accounts receivable in real time and offer online bill pay for a faster, smoother experience. Better family experience It’s not just your accounting team that will appreciate online bill pay. Your families will too, enjoy better visibility into their own billing details via an online payment portal, plus the ability to pay with a credit card. Smoother audits Having all of your financial data in one centralized, cloud-based system makes it much simpler to prepare for audits. You’ll also face a reduced risk of errors in your data, helping you get a clean bill of health from your auditor. Incorporates innovative tools like AI Cloud-based systems now typically incorporate AI, which legacy systems are not able to do due to technology limitations. AI functions inside modern ERPs are also regularly updated, allowing your capabilities in areas like automation to evolve alongside AI technology. Outsourcing ready Finally, if your school is curious about outsourcing certain services ( payroll is an increasingly popular example ), a modern accounting system makes that easier to do. Outsourcing can be a useful option for schools that are having trouble filling accounting roles as veteran team members retire, and can give you access to an entire accounting team for the cost of a single in-house salary. Next steps If you’re a school CFO or finance director who’s curious about whether an ERP or modern accounting system could help your school operate more efficiently and effectively, don’t start scheduling tech demos right away. First, reach out to an advisory firm, for guidance, that understands enterprise technology and has specific experience working with schools. An advisor can help you assess your current systems, identify specific pain points and decide whether it makes sense to transition to a modern ERP. Your advisor can also help you implement a new system and complementary solutions like outsourcing. Read more Why are more schools turning to outsourced payroll? Boosting cybersecurity in schools after the PowerSchool data breach 6 steps for effective succession planning in schools