What’s new in private school accounting?

As the landscape of private schools, charter schools, and faith-based education continues to evolve, so too does the accounting that supports it.

Gone are the days when spreadsheets and ledgers were enough to keep track of finances—today’s private schools face a dynamic mix of funding sources, regulatory requirements, and financial challenges that demand innovative solutions.

Download the e-book: Benefits of Cloud Accounting Software for K-12 Private Schools

In this article, we’ll explore trends and challenges in school accounting and reveal how two leading technology providers are working together to enhance private school accounting practices.

Whether you’re an administrator looking for ways to streamline your processes or a finance professional seeking insights into best practices, staying informed about what’s new in private school accounting will help your institution thrive in today’s complex environment.

Here’s what we’ll cover

What’s new in school accounting?

Recent trends in accounting for private K-12, charter, and faith-based schools reflect changes in the educational and nonprofit landscape, regulatory updates, and technological advancements.

Here are some notable developments shaping the future of school accounting:

Enhanced financial reporting standards

Accounting standards from the Financial Accounting Standards Board (FASB) affect how nonprofit schools report financial information.

Changes in areas such as accounting for expenses, fund restrictions, and student aid can all impact school financial statements.

It is essential to stay up-to-date on changes in nonprofit school accounting standards.

Increased focus on transparency

There is a growing emphasis on financial transparency and accountability in private, charter, and faith-based schools, including more explicit reporting on how funds are allocated and spent.

Technology integration

Schools are increasingly adopting sophisticated cloud-based accounting and financial management systems to streamline financial operations and offer real-time financial insights.

Cloud-based systems and integrated platforms link accounting systems with other applications used by schools such as tuition management.

Regulatory compliance

Private schools face evolving compliance requirements, such as those related to federal and state grants, tax regulations, and donor restrictions.

Staying current with these regulations is crucial for avoiding penalties and maintaining funding.

Internal controls and risk management

There is a growing focus on developing strong internal controls and risk management practices to prevent fraud and ensure financial integrity.

This includes regular audits and internal reviews.

Funding and revenue diversification

With changing funding landscapes, schools are exploring diverse revenue streams, including grants, donations, and tuition adjustments.

Accounting practices are adapting to manage these varied sources of income effectively.

Performance-based budgeting

Many schools have adopted performance-based budgeting, where planning is tied to measurable outcomes and performance metrics.

This can help ensure the alignment of resources with educational goals and priorities.

Data security

As schools handle sensitive financial information, data security and protection are becoming top priorities.

Implementing robust cybersecurity measures and ensuring compliance with data protection regulations are critical.

These trends reflect a broader move towards more efficient, transparent, and accountable financial management in private, faith-based, and charter schools.

The importance of having sound school accounting practices

Efficient and accurate school accounting drives better learning outcomes through enhanced transparency, better stewardship, and more informed decision-making.

By prioritizing sound accounting practices, schools better serve students and ensure long-term success.

Private schools must comply with various financial regulations, such as tax laws and auditing standards.

Failure to do so can result in penalties, damage to the school’s reputation, and even legal consequences.

With well-maintained financial records, schools allocate resources more effectively, leading to better educational outcomes and improved facilities.

Better insights help identify areas for cost savings so schools can invest more in programs that benefit students.

Transparency in finances fosters a sense of community, encouraging parent support and engagement.

Parents feel reassured about tuition when they see it used wisely.

In addition to tuition, private schools often rely on donations and grants for funding.

Maintaining accurate records and providing detailed financial reports instill confidence in donors and increase the likelihood of continued support.

Common challenges in private school accounting

Private school accounting faces a unique set of challenges.

Managing tuition, fees, and scholarships involves complex decision-making. Leaders must balance affordability for students and families while ensuring financial sustainability for the school.

Fundraising efforts add another layer of complexity.

Tracking donations and managing donor expectations can be time-consuming yet essential for long-term viability.

Accurate record-keeping in this area ensures transparency and builds trust with supporters.

Monitoring endowment funds also requires careful attention. Schools need to navigate investment strategies while adhering to donor restrictions.

Mismanagement could lead to missed opportunities or compliance issues.

Lastly, disparate software systems and staffing shortages can hamper finance team efficiency.

Overworked, tired personnel may make more mistakes and fall behind in financial reporting.

Disparate systems cause data silos, extra data entry, and a lack of real-time visibility—all of which hurts a school’s ability to deliver valuable services to students.

Sage Intacct and FACTS Connected Suite gives schools more financial control

Software systems that can’t share data frustrate school finance teams.

But there’s good news: Your school now has more control over how you manage your finances.

Sage Intacct and FACTS have partnered to deliver a connected suite for tuition management, fee collection, fiscal management, and fund accounting to K-12 private, faith-based, and charter schools.

This native, cloud-connected suite automatically connects the data between the industry’s top school management solution and the leading nonprofit accounting solution, giving schools more flexibility and choice in their technology stack. In addition, cloud-based technology offers complete security for your data and allows you to deploy immediately without any upfront expenses.

Automatic data integration

Integration increases efficiency, enhances real-time visibility, and eliminates duplicate data entry.

The Sage Intacct and FACTS Connected Suite syncs tuition and other payments with the school’s general ledger, financials, and dashboards.

Choose what data to synchronize to maintain control and accuracy, whether you administer one school or 100 schools.

Better insights for informed decision-making

School leaders need meaningful insight into financial performance, including details on fund allocation, location-based performance, program expenses, and any other factors specific to their mission.

The Sage Intacct and FACTS Connected Suite streamlines school operations by providing instant access to real-time reports, dashboards, and visualizations that enhance visibility.

Synchronizing data from FACTS into Sage Intacct’s dashboards and reports allows for better tracking of school outcome metrics.

This enables leaders to make informed decisions and act proactively with real-time insights into school finances, enrollment, and performance.

Final Thoughts

Private school accountants face unique challenges. Managing tuition fees while ensuring a steady flow of donations can be daunting but essential for sustainability.

Monitoring endowment funds and grants adds another layer requiring diligence and strategy.

Efficient accounting practices are more crucial than ever as they ensure schools can navigate challenges effectively.

Technology can transform efficiency—especially if critical software solutions seamlessly share essential data.

Embracing automation, integration, and data analysis will improve financial efficiency and reveal insights that benefit student outcomes.

Schools that prioritize budgeting, expense tracking, and regular financial health reviews will find themselves better equipped for uncertainty.

Best practices in financial reporting enhance transparency and foster a culture of accountability that resonates deeply with parents and donors alike.

Discover how cloud accounting improves nonprofit financial management outcomes for schools when you download the Benefits of Cloud Accounting Software for K-12 Private Schools e-book.

About the author

Natalie Anderson

Natalie Anderson is a senior nonprofit industry marketing manager for Sage Intacct.

With 10 years of experience in software marketing, Natalie is passionate about helping nonprofits leverage software to achieve mission success.