2024-25 Updates to Academies Chart of Accounts

Like any corporate organisation, an academy needs to be in the pink of its financial health. However, in an era of rising costs, staff salary demands, and an evolving economic climate, the pressure to sustain and maintain finances in the education sector has become more intense than ever.

Like every year, academies and multi-academy trusts (MATs) have to submit their financial reports before the academic and financial year comes to an end. However, it's slightly different for the year 2024-25 with the changes in the academies chart of accounts. New updates were introduced this year, featuring new codes and description changes to incorporate into your academy or trust's accounting systems.

While your academy or trust may have already incorporated some of these changes into their systems, it's best practice to ensure you remain compliant and up to date. Our blog will help you review these new changes in a succinct way, focusing on the significant updates to the academies chart of accounts for private schools, academies, and trusts. 

What Is the Academies Chart of Accounts?

The academies chart of accounts (CoA) is a framework designed by the Education and Skills Funding Agency (ESFA). It features accounting codes that assist academies in reporting their financial, accounting and budgeting transactions.

This standardised framework helps academies in the UK comply with the statutory reporting requirements and ensure transparency in their communication with stakeholders.

Keystone Knowledge has a team of education finance experts, many of whom have been CFOs, to guide academies and trusts in the UK in complying with the academies chart of accounts best practices.

Let's explore the most recent updates from the chart of accounts complete list of changes and explain what they mean for your academy.

Key Changes in the 2024 Academies Account Direction

In its 2024 edition of the Academies Account Direction (AAD), the ESFA has issued a few significant updates and clarifications for academies and their accounting teams to make note of.

Meeting New Financial Reporting Standards

The CoA changes align with the new Financial Reporting Council (FRC) standards. Under these changes, the emphasis is on accurately defining income streams, such as grants or donations, like the National Tutoring Programme. There's also an increased focus on reporting various environmental, social, and governance (ESG) factors. 

Updates for Accounting Codes and Code Structures

To embrace simplicity, the ESFA has removed obsolete and underutilised accounting codes while frequently used codes have been streamlined for easy identification.

New codes have been introduced for funding inclusion and diversity initiatives. Moreover, the list of sources accounting officers use to inform the AAD during formal financial reporting has been refreshed.

Integration with Digital Accounting Systems

Academies in the UK are increasingly leaning towards adopting digital accounting tools and software. Keeping this in mind, the EFSA has developed supporting technology to reduce the load of academies submitting their financial data.

The updated CoA technology is the latest in the chart of accounts best practices designed to be compatible with most common accounting software and financial management systems, enabling you to submit your trial balance data directly to pre-populate up to 80 per cent of your account returns. This step can minimise errors and inefficiencies in manually entered and submitted data.

For Multi Academy Trusts

Additional reporting categories have been added to improve reporting across member academies in a MAT. It can help in managing inter-academy transactions and shared services.

What Do Changes in the Academies Chart of Accounts Mean for Your Academy?

The new updates to the academies chart of accounts for private schools aim to simplify compliance with the regulations while defining a solid structure for financial governance.

Keeping these changes in mind, before their account submission, academies need to:

• Review the updated CoA and familiarise the accounting team with the new codes and structures.
• Integrate their accounting system with the latest automated CoA template.
• Conduct training and workshops for accounting and finance teams to help them implement and report the changes without any hiccups.
• Identify the potential areas of improvement needed to meet the new standard requirements by auditing the existing processes.

Navigating the chart of accounts' best practices and aligning the accounting systems with the new updates can be time-consuming for your in-house accounting team without proper guidance and support. In addition to the routine operational responsibilities, these tasks can be difficult to manage. However, these compliance tasks must be completed to avoid problems from late reporting, errors in entries, or too much dependency on the AAD templates.

Partner with Keystone Knowledge today. Our team of financial experts can help you effortlessly meet the requirements for the chart of accounts for private schools, academies and trusts.

Bank on Keystone's Expertise for the Chart of Accounts' Best Practices

Keystone Knowledge is here to support your academy in its financial reporting tasks. We have multiple experts on our team with education-specific financial and accounting knowledge. Our professional services cover various aspects of MAT and school finance, from day-to-day financial management, internal scrutiny, budget construction and financial planning, ICFP strategy and advice, and financial reporting.

Whether you need us to fill a resources gap or establish a long-term commitment for MAT finance management, we can help.

Contact us today for more information about our bespoke MAT finance services.