Comparing Financial Management Systems
The ESFA published new guidance in November designed to support academy trusts in being able to make comparisons between different financial management system providers and enable them to choose one that will best facilitate the automation of their financial returns. Here Martin Cain signposts trusts to some of the key pointers in the guidance to help inform their procurement decisions.
Be clear about your FMS requirements
- Identify your requirements, setting out what you want from your FMS provider and try to prioritise what is most important to you - you may not require all the functionalities that the providers have to offer;
- Consider what is essential for you now and what you will need in the future to fit in with the strategic aims of your trust;
- Start by assessing your current and near future needs and consider which providers are appropriate for your setting;
- Prioritising will help you to choose by using a balanced score card or weighted decision matrix to help focus your analysis. The DfE has provided the checklist below to help you; and
- Remember if you miss something out it may cost more once you have negotiated or installed your new system.
FMS provider review checklist
Trusts should use the following checklist when reviewing their FMS provider:
What are the benefits of automation?
Over 35% of trusts have adopted the academies CoA (Chart of Accounts) and increasingly realising the benefits of automation. There are several reasons why it is better for academy trusts to use automation:
- Efficiency savings will include time saved inputting and reconciling data and reduced auditor time if coding is done correctly the first time;
- Due to the improved data quality the allocation of transactions and balances being less subjective, a trust will have improved insights via VMFI (View My Financial Insights Tool), benchmarking and a transparent year end to end audit trail of financial data;
- Greater standardisation across trusts will provide improved opportunities for re-brokerage, the use of one CoA and make it easier to change FMS (Financial Management System) provider;
- Trusts will be able to better mitigate the workload impact of new DfE financial reporting requirements and take advantage new improvements and developments in financial management and administration processes; and
- If more trusts adopt the academy's CoA and use automation, the DfE will be in a better position to be able to provide support for them.
The financial comparison matrix
- The FMS comparison matrix has been provided to help academy trusts find and compare FMS providers so that when they are considering upgrading their existing software or procuring new software, they will know which suppliers to obtain quotes from; if their supplier is shown as not being able to automate, trusts should contact them to find out why this is the case:
- The matrix is designed to clarify the key features of known FMS providers in the academy trust sector and speed up the time taken to narrow down the options to a provider shortlist;
- The aim of the matrix is to make it easier for schools to switch between FMS providers and to establish a strong and competitive market which promotes transparency in pricing structures and the services offered; and
- The DfE will keep the matrix up to date so that, for example, if a supplier has developed automation, this will be noted in the change log.
Key steps for trusts to take when reviewing FMS options
- Agree the regularity of reviewing your FMS with trustees;
- Consider the following about your current FMS provider;
- Do they support the adoption of the CoA and automation?;
- What additional features does their upgrade offer you?;
- Can you negotiate a better deal by getting quotes from other FMS providers?;
- Can your auditor share any experience they have of other FMS providers?;
- Can your auditor help you in mapping your existing CoA to the academies CoA?; and
- Can you find someone in your professional network who has adopted the academies CoA and share their experiences with you?