PROCURE AND PLAN > CASHLESS SYSTEMS
32 INDEPENDENT EXECUTIVE | APRIL 2015
PROCURE AND PLAN > CASHLESS SYSTEMS
CASHLESS SOCIETY
While some schools are taking the leap without any qualms others are more
reluctant to get involved. No, we’re not talking 1:1 tablets or the IB, but
a more behind-the-scenes trend: online payment systems. Austin Clark
speaks to those in the know about the benefits of going cashless
eemingly everywhere we turn Britain is ditching cash
in favour of cashless payment. In fact, according to
Barclaycard, the number of cash transactions completed
in Britain has fallen by a massive 5.6 billion in the last
five years as the cashless society moves closer.
“Consumers switching from cash to card payments is an
increasing trend that cannot be ignored,” adds Colin Swain, global
head of product at Kalixa, a payment processing company. “Our
latest survey of 2,000 consumers in the UK revealed that 82% of
consumers prefer to use cards for purchases over £20.”
With this in mind, isn’t it about time schools joined the cashless
society and looked at ways of introducing online payments?
S
THE BENEFITS
“The administrative overhead of collecting money from parents for
the likes of school trips, lunches and uniforms can be significant,”
comments Kirsty Cumming from Schoolcomms. “Just keeping a
record of who has paid how much for what can be considerable and
that’s before you’ve physically dealt with the cash and cheques.
Online payment systems remove all these headaches for schools.”
Geoff Jones, marketing director at ParentMail, adds: “One of the
many challenges for schools is trying to compete with parents’ busy
diaries and ever-changing lists of priorities. Every now and then
things slip our minds and, as a parent myself, I understand how
frustrating it can be to arrive at the school gates and realise too late
that you’ve forgotten the permission slip for an upcoming school trip
while the last of your cash was eaten by the parking meter! Cashless
payments simplify everything and streamline the process. Sometimes
it’s easier to get access to the internet than it is to access a cashpoint
when you’re on the move! Cashless payments are increasingly
becoming the norm so it’s a natural progression for schools and other
businesses to take advantage of the technology available to make the
payment process as easy as possible.”
SIGNIFICANT ADMIN SAVINGS
Rob Munro, school business manager at St Michael’s C of E (VC)
Primary School in Bournemouth, says that a newly introduced online
payment solution has made payments convenient for parents while
saving administration staff 15 hours per week that were previously
spent counting cash. The school introduced a pre-ordering service for
school meals, a trip management and payment service and a general
payment collection solution.
“The school’s governing body was keen to bring cash payments
to an end in line with our school expanding from two to three-form
entry,” explains Rob. “This coincided with a number of parents
enquiring about an alternative method of payment to cash
and cheques.
“My main objectives when selecting the new system were to save
time and to introduce a more efficient payment solution, one which
meant I could be more accountable for the income and expenditure
across the year. The pre-ordering for the meals’ service was selected
to deal with the increased number of meals we were anticipating per
day and to meet the need for a more convenient payment method for
parents – the existing system involved them queuing up outside on
Monday mornings. Trips and other payments were becoming difficult
to manage; we pride ourselves on running a large number of trips for
our children but it was important to show the associated income so
each could be budgeted accordingly.”
Rob says that online payments have modernised the school
and parents can now make payments from the comfort of their own
homes rather than wasting time queuing in the morning when they
may need to get to work – a move that has encouraged parents to pay
more promptly.
“Additionally, I can now interrogate payments in fine detail to
get a real time picture of what the income is rather than waiting for
cheques to clear or a bank run to be made, which took my admin
staff away from their primary functions. Being able to print off a
real-time list of transactions has all but eradicated any discrepancies
The online solution has saved
approximately 15 hours a week
for my administration staff,
which equals 24 days a year
over whether payments have been made by parents or not. This,
combined with a reduced amount of time needed to reconcile cash
and cheques and less need to undertake banking runs, means that
the online solution has saved approximately 15 hours a week for my
administration staff which equals 24 days a year. The time
taken to process the school meal payments and prepare the order
for the catering company has reduced from two days to 15 minutes
because all the meal selections and financial information is already
populated online.
“The administration time for processing trip payments has also
been drastically reduced. Previously, it would take an hour from
INDEPENDENT EXECUTIVE | APRIL 2015 33
PROCURE AND PLAN > CASHLESS SYSTEMS
the payment being handed in to it being completely processed – an
hour which is now freed up for other tasks. We run approximately
108 trips per year which means that, per year, we are saving three
weeks of staff time.”
THE MECHANICS
So how exactly do online payment systems work? When it comes to
school catering Geoff says most schools operate a system whereby
parents pre-pay an amount online via their account, for example £20.
“Primary schools will often work by pre-setting dinner costs against
each child; then each day, or sometimes weekly, they complete a
dinner register which automatically deducts the value of the meal from
the parent’s account,” he explains. “Once the parent’s account has
fallen below a certain level an alert is sent reminding them to top-up.
Some larger schools operate cashless catering systems and for these we
provide a ‘front end’, integrated with their system but allowing parents
to pre-pay online and again receive automatic alerts.”
Kirsty adds: “Schools can create ‘payment requests’ – for
example, for a school trip, where you can select how much, when
and who should pay. Parents then have a web or smartphone app
where they can see what items they need to pay for and make
payment using credit, debit or instant bank transfer. Most systems
provide email and SMS communication to make it easy to prompt
parents when there is something new to pay for, or to chase late
payers. The school gets a full view of all the payments being made by
parents and a suite of reports to easily reconcile the money landing
in their account with who has paid for what.”
IMPLEMENTATION
With many independent schools still reluctant to adopt a cashless
system because of fears that parents won’t be on side due to
concerns over fee payments, administration issues and security,
many educational establishments are dipping a toe in the water
by using a cashless model with their catering provision. If the trial
proves successful online payment can then be rolled out throughout
the school.
If you do decide to take the plunge and invest in an online
payment solution our experts suggest asking a number of questions
about the various options on the market.
“In addition to finding out about the reporting methods offered
schools should ask whether it’s simple and easy to set up and if the
solution integrates with other systems,” says Kirsty. “It needs to
integrate with your MIS to collect parent contact information, class
groups and permissions. All systems levy transaction charges – some
of the newer systems provide instant bank transfers, which can be
much cheaper than traditional debit or credit card payments and just
as easy for parents to use.”
When it comes to security, Kirsty says that parent authentication
needs to be secure but it also needs to be easy to use. “If the login
process is painful then parents simply won’t use it. And you need to
make sure that the system doesn’t require the school to send out the
usernames and passwords otherwise the time savings of collecting
money online can be used up managing user accounts. The best
systems manage all the parent authentication and user accounts
with no intervention required by the school. It’s very much worth
establishing what methods are in place to protect data.”
Clint Wilson, chief executive of ParentPay, adds: “The business
case for going cashless will be strong if schools maximise the number
of items they collect income for online. This can include payments
for school meals, clubs/childcare, trips, fees, room rental and extracurricular activities. Find out how much administration time is
currently spent on cash collection, then do a simple time/effort, cost
and benefit analysis for going cashless.”
Geoff points out that it’s always worth asking other schools that
have been using cashless payment systems what their experiences
have been like before investing in a new system yourself. “That way
you can get a feel for which systems are more efficient than others
from an unbiased source.” 
34 INDEPENDENT EXECUTIVE | APRIL 2015
Most systems provide email
and SMS communication to
make it easy to prompt parents
when there is something new
to pay for
hr and legal > Charitable status
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hr and legal > Charitable status
Feeling
charitable?
under the 2006 Charities act,
independent schools are required
to demonstrate that they offer
benefits to a public beyond
their own fee-paying pupils. the
independent schools Council says
the requirements to show how
schools offer ‘public benefit’ are
unfair, others say they don’t do
enough. Julia dennison looks at
the issue and its impact on schools
a
ccording to government
statistics, just over half of the
UK’s independent schools have
charitable status. The benefit of
a school becoming a charity is
predominantly monetary. Evidence from HM
Revenue & Customs back in 2009 indicated
that tax breaks received by independent
schools registered as charities is worth
approximately £100m a year. This money,
in most cases, is put back into the school
to be put towards often much-needed
improvements, whether it be upgrading the
ICT facilities or hiring a new teacher.
There are other benefits to charity status,
according to Emma Ladd, an associate
solicitor at Stevendrake Solicitors in
Crawley. “People see you as less of a moneymaking exercise [if you’re a charity],” she
says. “With most independent schools you’re
talking about a fairly substantial outlay for
most parents and a lot of them want to have
that reassurance that this money isn’t just
going into anybody’s pocket, but being used
for the benefit of the school generally and
the charitable status helps to give them that
reassurance.” (See box out for a full list of
benefits.)
application process
While the process of applying for charitable
status itself is not overly arduous, actually
getting it can be more of a challenge. Ever
since the passage of the Charities Act
2006, schools have to prove they are of
sufficient public benefit to achieve the status
(previously being a provider of education
was enough). This is where a recent legal
case has come in between the Independent
Schools Council (ISC) and the Charity
Commission to determine just what criteria
schools have to meet to prove they help the
wider community.
Ever since 2006, offering a good amount
of bursaries has, for the most part, been
sufficient, but the Charity Commission
has challenged this, saying schools should
play more of a leading role in the local
community – whether through leasing out
their facilities for reduced rates, for example,
or forming links with nearby state schools,
like underachieving academies, perhaps.
Five ISC schools underwent ‘public
benefit assessments’ by the Charity
Commission between 2008 and 2009, with
two of them requiring reassessment in
2010. While all five were ultimately given
clean bills of health by the commission, the
ISC has long expressed concerns that the
commission’s actions were both based on an
incorrect understanding of the law and were
doing little to clarify just what charitable
schools have to do to meet the commission’s
public benefit test.
So the ISC sought a judicial review in
hopes of achieving a definitive legal ruling
on the subject. The judicial review was
heard in May of this year, together with a
related application made by the Attorney
General – which shows the ISC’s request is
being taken seriously.
“Whatever the result, the fact the
Attorney General felt the need to refer
similar questions to the courts vindicates
what we have been saying all along: that
there are serious misgivings about the
commission’s approach and a desperate
need for legal clarity,” comments Matthew
Burgess, deputy chief executive of the ISC.
“Our claim is not special pleading by a
privileged interest group trying to cling on
to tax privileges; rather, it is a challenge
to a regulator rewriting the law to suit its
ideologies.”
defining ‘public benefit’
This amorphous definition of ‘public benefit’
has left many private schools scratching
their head about just what it is they have to
do to meet charitable requirements. Some
schools have even opted for non-profit status
instead. Inter High Education is one. It runs
two virtual schools on the internet – Inter
High School, a private secondary school,
and Academy21, a state school designed
as an online resource for existing schools
that need to educate their children off-site.
Inter High contemplated charitable status,
but decided to settle on being a non-profitmaking company instead, to avoid setting
up a board of trustees who might not all
agree with their unique vision. “This means
we’re VAT exempt and all the usual things
that charities enjoy, but it means that we can
maintain the direction we think it should
head,” remembers school development
officer Jacqueline Daniell.
Meanwhile, critics, such as Fiona Millar
at the Local Schools Network, are adamant
independent schools should be asked to do
more than just supply funding for poorer
pupils. “Bursaries, as they are currently
constructed, should not justify charitable
status,” she says. “Many do not cover the
full fees and most are linked to academically
selective tests more likely to favour the
impoverished middle classes than the
socially excluded poor.”
Millar says offering smart but poor
pupils bursaries may also deprive state
schools of the academic mix they need to
thrive. “We should go much further and
require more exacting eligibility criteria for
bursaries, with no academic selection and
a focus on the pupils in state schools most
at risk of exclusion who might benefit from
the smaller class sizes and extra resourcing
that private schools can offer,” she suggests.
“State private partnerships should make
a quantifiable impact on the performance
of local state schools and on their most
needy, rather than most able, pupils and
there should be more rigorous methods of
measuring that impact.”
There are serious misgivings about
the commission’s approach and a
desperate need for legal clarity
28 independent exeCutive | aug/sept 2011
When the ISC responded to the Charity
Commission’s consultations on its draft
guidance two years ago, it prefaced its
response by placing on record its concerns
that ‘the current direction of travel of the
Charity Commission inevitably places it on
a collision course, not just with eminent
charity lawyers but, more importantly, with
thousands of charities that have no option
but to recover the costs of the services
they provide through levying fees … when
so many charities are affected by legal
uncertainty, it is incumbent on the Charity
Commission as their regulator to pause and
give proper consideration to final guidance,
with a view to bridging differences of
opinion and reaching the broadest possible
consensus on what “public benefit” really
means.’ The Charity Commission rejected
the call at that point, hence the ISC’s move to
a judicial review.
plans put on hold
As we go to press, the ISC and many
independent schools await the final guidance
regarding charitable status. A decision on the
Attorney General’s reference has not yet been
made by the Tax and Chancery Chamber of
the Upper Tribunal, however even without
that reference, the Charity Commission
plans to review its guidance because of
the potential effect it could have on more
than just independent school charities.
The Charity Commission told the Upper
Tribunal in May that trustees of fee-charging
private schools are “not expected to do the
impossible” and would have their individual
circumstances taken into account when their
public benefit is assessed. “From a lawyer’s
point of view, this is too nebulous to be
of any help,” comments Ladd. “Hopefully
the guidance will reflect that other forms
of benefit can be given without necessarily
being in the form of bursaries – and you
don’t have to give up, say, 20% of your
income to maintain charitable status.”
If nothing else, the ISC is confident that
this time it will be taken seriously. “We can
now be certain that the next stage in the saga
will deliver definitive and accurate guidance
to an area currently bereft,” comments
Burgess. For the schools wishing to apply
for charitable status as we write, the general
advice is wait for the feedback and in the
meantime, keep a record of all activities that
could be construed as public benefit – you
never know what will come in handy. 
UTIVE
FORWARD THINKING FOR ACADEMIES, FEE-PAYING AND FREE SCHOOLS
Staying ahead of
the competition
In an era of state-run
independents, can private
schools still compete?
benefits of becoming a charity
•
•
•
•
•
•
exemption from the payment of
income and corporation tax
eligibility to receive charitable
donations parents, supporters and
companies
eligibility to apply to grant-making
charitable trusts
ability to apply for gift aid
promotes the message that your
organisation is working for the
benefit of others
establishes a clear set of rules by
which your organisation must work.
A guide to fundraising
Quick tips on how to boost
your school’s cash flow
Feeling charitable
What does it take to be a
charity these days?
Brought to you by
EDEXEC
SEPT/OCT 2011
EXEC
independent exeCutive | aug/sept 2011 29
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