August Activities for the CFO (beside vacation)

The first week of August is upon us and whatever will betide the fall is becoming more clear. What are some of my clients doing around this time?

Well, first of all, the deadline for finalizing payment for the fall often occurs this week. I have suggested a deadline of August 5th through 9th as what some call the confirmation date. A Wednesday is a good deadline; either the first or second one of August. This allows a little cushion for those who are late in their arrangements. By the close of business on Friday, everyone who has not yet confirmed will be assessed a late fee of $100. I can tell you that it works. If you are lax about such items, be prepared to have about three times the normal staffing for the first two weeks of school.

Second, those who have put in a mechanism to track financial aid by class are getting a clearer picture of fall’s revenues. Track the net tuition for all of those who have deposited for the fall and then for those who have confirmed (agreed to the charges and the method of paying them.) If your system doesn’t allow for this kind of analysis, create a work around. Census day is somewhere around six weeks from now and may deliver an unpleasant surprise. Better to know now. You’ll need the tools to do so.

Third is related to the second and involves gleaning more information off the invoice for room and board. Look at billed R and B and the same charges for those who are confirmed. This is typically the second largest source of revenue for most institutions. You want to be on top of it and should be able to produce a projection even now.

Fourth, under the assumption that the second and third considerations are well in hand, a projection of the second semester is appropriate. Most use a general retention rate. A better approach is to track the difference in populations for each class between the semesters. This is a little different from retention in that there will be some who earn enough credit before the spring to be classified in a higher class. Others will stop out and some will transfer in. By merely comparing the raw data for fall and spring by class, it will yield a better approximation of the total year’s pro-forma than a general retention rate.

Finally, CFOs and enrollment people are looking at where non-traditional activities are heading. For most programs, students who carry over from one year to the next represent between 65% and 75% of the new year’s revenue. This is true in part because the carry-over student is paying tuition from the beginning of the fiscal year, with many paying for the entire year (52 weeks worth.) Some of my clients are using my Non-Traditional Revenue Projection Model (RPM) to provide projections. It is available, free of charge, just for asking.

When the turnstiles stop and your audit is complete, please consider adopting the COMP4cast budgeting and forecasting tool, also available free to those who ask. The ideal time to deploy this is in late September. By October 15, you will have a good sense for the current year and a preliminary look at next year’s revenues. This has been very well received by every adopter. Oh, and I tend to assist with implementations in the fall, if doing it on your own doesn’t get you there. My involvement will set you back two days and about three grand. Most see it as a great way to fast track the process and deliver a pretty impressive series of reports to the board at the fall meeting. I’d love to chat with you about this.

I’m wishing you all great success this fall as the new class arrives and students return. You are doing important work, my friends. Keep it up.

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