Many schools meet their auditor once a year, and the meeting is stressful because the books were never meant to be read by anyone else. Fee income sits in one register, salaries in another, and the bank statement is checked only when something looks wrong.
The good news is that an auditor asks for the same handful of things every time. If you keep them all year, the audit becomes a review and not a rescue. This guide is practical, not legal advice. Your auditor will tell you the exact format they need.
1. A chart of accounts that everyone uses
A chart of accounts is the list of every account the school keeps: cash, each bank, tuition fee income, admission fee income, salaries, utilities, fixed assets and so on. Give each account a code and a name, and group them into headings such as fixed assets, cash and bank, fee income and staff expenses. If your auditor already has a chart for your school, start from that one. Do not invent a new list.
2. A voucher for every entry
Every payment, receipt and adjustment should have a voucher with a number, a date, the accounts involved, the amount and a line of explanation. Payment vouchers carry a signature. When the auditor picks a random transaction, you should be able to find its voucher and its paper in a minute.
3. Fee income recorded in the same books
Fee payments should feed the books automatically, not be copied from a register at month end. When a payment is recorded at the counter, the cash or bank account and the fee income account should both change. If your fee software and your accounts are separate, the difference between the two is the first thing an auditor will find.
Note that there are two ways to record fee income. On a cash basis you record it when money arrives. On an accrual basis you record it when you bill the fee, and track what is still receivable. Ask your auditor which basis they expect.
4. Salaries that match the salary sheet
The salary total in the books should equal the total on the signed salary sheet for the month. Advances to staff should sit in their own account, so you can see what each person still owes.
5. Bank reconciliation every month
At each month end, compare the bank statement with the school's bank account in the books. List what is in one and not the other, such as a cheque not yet cleared or a deposit not yet recorded, and explain every difference. A bank reconciliation done monthly takes an hour. One done once a year takes a week.
6. A fixed asset register with depreciation
List each asset the school owns, such as buildings, furniture, computers and generators. For each one record the cost, the date bought, the depreciation rate and the value after depreciation. Handle disposals carefully, because an asset sold or scrapped should leave the register with an entry.
7. The statements the auditor expects
For a school, these are usually a balance sheet, an income and expenditure statement, and a receipts and payments statement, often with last year's figures beside this year's. Grouping accounts under clear headings makes these statements readable.
8. A clean year end
At the end of the financial year, income and expense accounts are closed into the fund or equity account, and the new year starts from the closing balances. Confirm your financial year dates first. Many schools run January to December, others July to June.
Doing this in Skoo
Skoo keeps double entry books alongside fees and payroll. You can import your chart of accounts from an Excel file. The first row needs the headings Code, Name and Type, with Group if you use groups. Skoo lists the rows that have a problem and imports the valid ones. Accounts can be placed under groups, and the balance sheet and the income and expenditure statement show the groups.
Skoo prints vouchers, a receipts and payments statement with a comparison to last year, and an audit pack of the reports an auditor asks for. There is a fixed asset register with depreciation, bank reconciliation, and a year end close. You can set the financial year start. Fee payments and salaries post to the books through the accounts you connect in the account settings.
What Skoo does not do yet: fee income is recorded when cash is received, so there is no accrual basis, and there is no cash flow statement or restricted fund accounting. Skoo prepares reports. It does not replace your auditor. See school accounting in Skoo.