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Schools turn to smart revenue sources – as budgets squeezed

Schools are turning to high-tech innovation to raise money and save costs, as tough economic conditions squeeze education budgets in South Africa.

Finance Minister Tito Mboweni’s Medium-Term Budget Policy Statement, in late-October, included no increases in education budgets – amounting to de facto decreases in funding for schools, once inflation is taken into account. And this barren season for education is likely to prevail for the next three years.

The landscape is as barren on the school infrastructure front – in particular the Education Infrastructure Grant (EIG) – piling further pressure on schools in need of vital upgrades.

But progressive schools are pivoting to new income-generation opportunities to survive their budget shortfalls. The most innovative among these opportunities is advertising revenue for schools, from an exciting new community ad-channel.

The new “local listings platform” was launched by d6 on November 1, where school families can find local services offered by trusted people they often know in their school or neighbourhood communities.

The local listings platform includes child specific services such as aftercare and child-care facilities, clothing and sports supplies, therapists, leisure and play offerings and services for parents such as electricians, plumbers, vehicle repairs, personal care etc. Best of all is that schools will share 50% on the advertising revenue generated through local listings.

“The concept is simple: Schools are at the heart of their communities – with thousands of people in every school community. The d6 advertising platform allows businesses which surround schools to advertise, and reach school families directly,” said Willem Kitshoff, the CEO of the pioneering South African school management platform, d6.

It’s not only small local businesses that can reach thousands of parents, but also major brands such as sports equipment manufacturers - a notoriously competitive market for school sports’ attention.

And the best part is: the schools share in the advertising revenue.

The revenue-generation windfall for schools is just one part of a suite of financial earning and saving opportunities offered through d6 – when schools need every rand and cent most.

These digital systems help schools’ bursars, financial controllers and all staff keep a close eye on a wide range of monetary activities at schools – from school fees to debt books, fundraisers to marketing, admin to sports tours.

“The management of school fees, in particular, has a huge opportunity for improvement,” explains Kitshoff. “You would be amazed at how inaccurate many schools’ systems are – when compared against learner registers. The best systems create learner profiles, to enable the school to see who has paid, and who has not; or analyse per subject – like all Maths students, in Grade 3 – to the precise cent.

“As an example of successful debt management: Assuming a school has a debtors’ book of ±R2m, improving the recovery of debt by only 10% means R200k additional income,” Kitshoff said.

In addition to school fees, there are at least three more primary ways smart systems can save schools money – and earn them more.

First, savings in “direct costs”. These include:

  • Abolishing last-century communications like SMS messaging. Instead, communication is now available through smart apps. Equally, printing costs can be slashed, as letters to parents, report cards and many more important communications are relayed digitally.

Second, savings in “indirect costs”: These include:

  • Time used to manage data over multiple systems is not required.
  • Better decision making due to easy access to real time data (curriculum, admin and finance).
  • Cashless payments.

Third, integrated management systems can vastly improve debt management. Indeed, many schools struggle with managing their debtors which leads to significant bad debt. Although this will never be fully mitigated, there are benefits to using “smart systems”. 

These include:

  • Accurate billing: Due to systems being integrated, learners who join the school will automatically be billed and when they leave, will automatically be removed. Thus no more missed billing or billing of left learners.
  • Improved communication: A system like d6+ offers effective ways to communicate with outstanding debtors. This can be done via automated communication when parents do not pay or to remind them to pay when payment are due. Parents can also pay school fees through smart integrated apps which makes the payment process seamless and integrates automatically into the school’s finance environment.

“At many, many schools, you will find school management teams scrambling to find enough funds to repaint a ‘Jungle Gym’. Using an integrated financial management system, thousands of Rands can be freed up, when it’s needed most,” Pretorius said.

“We studied every system on the market. We believed schools needed to have complete control – of every Rand and cent in schools’ financial eco-systems.

“We began by developing a deep understanding of how schools actually work. Some financial software packages are OK if you are running a supermarket or a petrol station – or any other general application.

“Instead, we built, from the ground up, a system specifically for schools. At schools, parents and learners are clients – hundreds, even thousands of them. You would be surprised at how often money needs to be paid back and forth in a school. Money is paid into schools – such as fees, extra expenses for school outings, school concerts and sports tours, etc. and schools pay out many costs – everyone from the main financial managers to rugby and netball coaches, for incidental expenses,” Pretorius explained.

A system such as d6+ offers a transparent view of available funds, per function.

“So nobody has to go running off to the finance team to ask how much is available in the sports budget, for example. They can see it clearly, with authorised access to the system.

“It is absolutely essential to have one system to manage money honestly, accurately and super-efficiently. This ultimately leads to a more available budget.

Asked why schools may be reluctant to change towards financial excellence,… he replied: “Often, schools may not be aware of these inefficiencies, but we have had hundreds of examples of schools which have taken the step to implement change, and have been amazed.

“Existing financial systems are simply not designed to manage finances on a per-learner basis. It has never been more important for schools to get their finances right – to the cent – in these difficult times.

“There are many schools still using systems which were born in the 1990s! It’s time for change, and best of all, through sharing in advertising revenue, the software can pay for itself and some more”

d6 group enquiries contact Tania Hoon at [email protected] or for Press Releases contact Lisa Pellatt at [email protected].

Editorial contacts
Tania Hoon [email protected]