Financial Harmony in Higher Education

Prophix Feb 12, 2018, 3:22:00 AM

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Effective integrated financial planning improves operational alignment and financial performance. For Higher Education institutions, aggregating related data for financial reporting, forecasting, budgeting, and long-term strategic planning can present a huge challenge.

The core financial drivers for Higher Education institutions are enrollment and attendance. An efficient and effective integrated financial plan takes into consideration where students are coming from, what programs are of interest and the cost to provide those programs. This strong financial foundation allows Higher Education institutions to compete with other education providers including community colleges and continuing education programs.

When establishing the cost of their programs, most universities follow a traditional model where a credit hour equals an X-number of dollars. This value varies based on how a particular institution values the cost to deliver a credit hour of a certain subject and the cost to the end-user for that subject. Demand for credit hours is also closely related to enrollment and subject interest – a testament to the importance of a unified approach to planning.

In addition, personnel are among the most expensive line items in Higher Education. An effective integrated financial plan must account for these costs by examining the number of tenured and non-tenured professors and their compensation. Consider also capital costs, such as building construction.

The challenge for many Higher Education institutions is integrating these variables into a single comprehensive plan. With Prophix, universities can incorporate enrollment, course costs and their personnel budget in a unified platform. This will improve long-term strategic decision-making and increase business flexibility.

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