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THIS IS ONE OF THE REASON WHY THE PROFIT YOU MAKE FROM YOUR SCHOOL IS SMALL AND WHAT YOU SHOULD DO TO INCREASE IT.

By the end of this post, you will discover one of the reasons why your school's profit is decreasing and what you need to do to increase it.

You will agree with me that one of the things you want as a private school owner is an increase in profit.

Now let me shock you.

For your school's profit to increase, you need to do something that you know but have been avoiding or possibly doing in a wrong way.

Wondering what that is?

Tracking your monthly expenses.

This is the one thing you have been avoiding or possibly doing in a wrong way.

But wait, what is the meaning of a school expense, and how do you track it so that your school's profit can increase?

Continue reading.

Expenses are outflows of money.

As a private school owner, any money your school spends to generate sales and run the school is known as expenses.

The fuel your school buys to power the generator in your office area or classrooms is an expense.

The NEPA bill your school pays to put light in classes and offices is an expense.

The salaries your school pays its staff are expenses.

The recharge card your school buys to call parents of students is an expense, etc.

Your failure to track and record these expenses will always decrease your profit.

Now that you know what an expense is, the next thing you should start doing so that your school's profit can increase is start tracking or recording these expenses.

Let me tell you some important things to take note of when recording any expense for your school.

1. The first thing you need to note is your school expense category.

As a private school owner, for any expense you record, you must categorize them properly.

You categorize by asking yourself the things that your school spends money on.

Examples of school expense categories are:

- Staff salaries and wages
- Transportation
- Security
- Licenses and permits
- Electricity
- Repair and maintenance
- Telephone
- Diesel and fuel

The simple reason why you are categorizing them is so that you can always know which of these expense categories are taking money out of your school the most. When you know the category that is taking money out of your school the most monthly, it helps you make better decisions.

2. Whenever you want to record an expense for your school, always take note of where the money was spent from.

Instead of writing, "I bought fuel 500 naira," clearly state out where the money was spent from.

An example is this:

"I withdrew 5000 from Zenith Bank Card and bought fuel 1000.

Or

"I bought fuel 1000 out of the 5000 cash I withdrew from Zenith Bank Card.

The reason why you are doing this is to know where the money is being spent from.

Imagine you withdraw money from your personal bank account to fuel the generator in your school.

This is why it's necessary to open a separate bank account for your school.

Doing it this way will tell you that your school is owing you and it needs to refund you your money. A lot of private school owners do not do this, and they don't know it's hurting their profit, so do yourself a favor by doing the right thing.

As a private school owner, you should always record the amount of your personal money that you use to fund your school so that your school will refund your money. When you do this, it helps you to know whether you are gaining or losing.

3. Whenever you want to record an expense for your school, always take note of all elements relating to the spending.

Instead of writing "I gave the Electrician 2000", clearly state out:

- The date
- Reason for the expenses
- Name of the person you paid
- Amount of money you paid.

4. Whenever you want to record an expense for your school, always test for completeness and reasonability.

Why do you need to test for completeness?

Very simple.

There are instances you might forget what you spend on your school a day.

How do you test for completeness?

Go to your bank and ask for a bank statement, check line by line for every money that left your school account and make sure you record them.

A lot of private school owners don't do this; it is the one they remember they record while some don't even record at all. This should not be your case if you want an increase in your school's profit.

How do you test for reasonability?

Let's say you normally spend 1000 on fuel a day, then coming the next day, your staff records that 5000 for just a day when you are not around.

As a private school owner, this is where you need to test for reasonability because if you don't do it, your school's cost will continue to increase and your profit will decrease.

Now that you know the one thing that you need to be doing for your business profit to increase, what is the best tool you should use to record these expenses?

I don't want this post to get too long so I will reveal it in my next post.

I hope you took something out from this post.

Before i forget , my name is Adeleke Femi David and i help private school owners save cost, stay within their budget, save time and increase their profits using cloud technology tools.
My contact details are on my profile or call it signature.

Thank you for reading.

Till i write again