5 Essential Steps for Multi-Year Financial Planning in Academy Trusts

As an academy trust, planning and managing school and academy finance go beyond balancing the books. Financial planning for schools is about creating a promising future that supports your academy trust's goals, staff, and students.

All this can be achieved with multi-year financial planning. This is more than just a tool for tracking money - it's a strategic financial approach to ensure your academy or MAT is financially stable, prepared for change, and able to deliver the best education possible to your students.

So, how do you begin? Here are five key steps to help guide your academy trust's financial planning approach. 

1. Financial Health Check - Get a Clear Picture of Where You Stand

Before you begin planning for the future, understand your current situation. Take the time to look at your current state of academy finances: sources of income, expenditure, and investments. It may seem like the obvious first step, but it's surprising how often these details get overlooked.

Conducting a financial health check isn't just about reviewing the numbers, it's about identifying trends in spending, income patterns, and areas where your academy can be more efficient. Consider benchmarking against similar academy trusts to see how your academy finances compare.

Tip: Use software or tools that can break down your school finances in real-time. This can give you an up-to-date overview of everything you need and help you make better financial decisions, faster.

2. Finance-Strategy Alignment - Set Clear Goals That Align with Your Vision

Every academy trust is different, and so are their goals. When you're planning the finances for your school or MAT, you need to consider your larger objectives, whether you plan to invest in staff training, update classroom technology, or expand school facilities. As you plan, you'll need to balance your short-term needs and long-term vision.

Keeping your financial goals aligned with your MAT's strategic objectives ensures your investments support your academy trust's core mission. Avoid setting financial targets in isolation. Instead, engage with the stakeholders of your academy trust, including governors, teachers, and parents, to ensure everyone is on the same page and to gain their consent and trust.

What do you want your trust to look like in 5 years? 10 years? Education and financial planning should be driven by that vision.

Tip: Set clear financial priorities now to ensure that your resources are used in the best way possible to reach those milestones. 

3. Don't Leave It to Chance - Forecast Your Income and Expenditures with Flexibility

Think and plan with the future in mind while you're financial planning for schools. No one can predict what will happen in the next five years, but you can still make educated guesses. How will student enrollments change? What are the long-term costs of staff wages, pension contributions, and inflation? What changes in funding will the government bring? Will there be any changes in your academy finance policy? What do trends teach you about your trust's future landscape?

Scenario planning is key. Create your MAT's best-case, worst-case, and most likely financial projections to prepare for different outcomes. Ensure you also factor in the evolving external economic conditions such as inflation rates, changes in education policy, and sector-wide challenges.

Tip: Be flexible in planning finance for schools and create optimistic, realistic, and pessimistic financial scenarios, so you can easily adjust if things don't go as planned.

Forecasting academy finance is about being prepared for the ups and downs, so you can stay on track no matter what comes your way.

4. Financial Cushion - Build a Safety Net with a Contingency Plan

A sudden rise in energy costs or a shift in government funding can lead to unplanned spending. In these times, you need a financial cushion or a contingency plan. Think of it as your safety net, helping you weather unexpected crises without derailing your bigger goals.

A contingency plan that consists of financial reserves supported by alert decision-making helps your MAT build financial resilience. You need to create a structured approach to managing risks, with the ability to respond quickly to financial uncertainties while safeguarding core services.

Tip: Try to set aside at least 3-5% of your budget for unexpected expenses. This may seem small, but it can make a big difference when you need it most.

Planning for the unexpected is one of the best ways to ensure long-term financial stability.

5. Review and Revise - Regularly Review and Adjust Your Plan

When you're planning finance for your school, you need to be flexible and ready to evolve with changing needs and circumstances. Review your financial plan regularly (quarterly or annually) to check if your academy or MAT is progressing as planned.

If required, raise questions such as: Are there any significant changes in funding? Are your priorities shifting? Make sure you adjust your budget as necessary to stay on track with your goals.

Use financial dashboards and KPIs to track performance against your academy finance plan. Regular audits and financial reviews not only ensure compliance but also drive better financial stewardship and resource allocation.

Tip: Set regular check-ins to make sure your plan stays relevant. The more you monitor it, the more flexible you'll be when changes come up.

Take Control of Your Trust's Finances with Keystone Knowledge

If you're looking to create a robust MAT financial plan aimed at future growth, you'll want to partner with experts who understand the unique financial needs of schools and academies.

With Keystone Knowledge as your academy finance strategy partner, we'll help you gain a long-term financial strategy that ensures stability and growth. Our education finance support services assist your academy in building a personalised MAT financial plan and growth strategy.

Our education experts are on hand to simplify this complex process, communicate with key stakeholders, and identify room for improvement, supporting you in establishing an all-round multi-year financial plan for your academy trust.

Contact us today to book your consultation.