Education sector CFOs face unique challenges, often working in isolation at the top of their trusts or schools. This can make decision-making, discussing complex scenarios, and finding someone who understands education finance especially difficult.
Peer support is essential for education CFOs, and we strongly advocate it through our CFO Connect service. To help you build a strong foundation, here are some best practices every education CFO should prioritise — tried-and-true disciplines that benefit from peer discussion, especially when overlooked during busy times
Understanding your balance sheet is foundational, yet it's an area where confusion can easily creep in. One crucial calculation every CFO should master is determining your true capital carry forward. The process is straightforward: deduct your tangible assets (your Fixed Asset Register value) from your fixed asset fund balance. If you're left with a negative value, that's a red flag requiring attention and rectification in the following year.
There's a common misconception that balance sheet items represent a separate "magic pot" of cash, free to be spent without impact on your day-to-day operations. The reality is far more nuanced. If you don't have the capital income to cover your capital expenditure, that spending will come from your revenue. It's easy to get carried away with capital projects, especially when facilities need attention, but maintaining this discipline is essential for long-term financial health.
Year-end doesn't have to signal panic stations. The auditors aren't the enemy! They're just doing their job, and you can make that process far smoother with good preparation. The best practice? Treat every month-end as if you're getting audit-ready. Devise a comprehensive month-end task list and stick to it religiously. When August arrives, you'll simply be running one more month's procedures rather than scrambling to piece together a year's worth of information. This approach not only reduces stress but dramatically improves the quality of your financial reporting throughout the year.
It sounds obvious, but it's surprisingly easy to fall foul of your own finance policy. As CFO, it's your responsibility to enforce financial procedures within your trust, which means you need to be vigilant about anyone who tries to cut corners. Consistency across the board matters. Don't let exceptions become the rule, and ensure you're modelling the behaviour you expect from others.
Finally, budgets are far more than an annual number-setting exercise. Careful, consistent budget monitoring ensures your trust has the financial stability it needs for the future. Allowing spending to spiral and lead towards deficit positions will inevitably increase DfE scrutiny – something every CFO wants to avoid. More importantly, robust budget control allows you to plan effectively for those challenging years two and three scenarios that make finance leaders wake up in cold sweats.
More importantly, robust budget control allows you to plan effectively for those challenging years two and three scenarios that make finance leaders wake up in cold sweats.
These practices might seem straightforward, but implementing them consistently whilst juggling the daily demands of a busy finance role isn't always easy. This is where having access to experienced peers makes a tangible difference.
If you'd like guidance on any of these areas, or simply want a sounding board for the challenges you're facing, ask us about our CFO Connect service. Sometimes, the most valuable resource isn't a consultant with a solution – it's a support team who have navigated the same waters and can help you find your own way forward.