The UK higher education sector has suffered a number of financial setbacks in the past year. In July, the Higher Education Funding Council (HEFCE) outlined £150m worth of funding cuts for universities in 2015-2016 and in the next year, funding is set to be reduced further to £3.7bn.
The reality is that UK education now has to operate within increasingly slender means. So much so, in fact, that some hard-up universities are turning to increasingly desperate measures such as slashing grade requirements to attract students and their tuition fees.
But universities need not risk causing long-term damage to their reputation and quality of education in order to raise funds. Instead they must consider ways to reduce costs by making their internal processes more efficient, and by doing so both improve the student experience and insulate themselves against further cuts.
What universities often neglect to consider is that more efficient processes do two things: reduce cost and add value. Here are a few examples of how this can be achieved:
1. Eliminate or reduce cash payments
UK universities are still manually processing enormous amounts of cash transactions. And truth be told, cash is awkward: it needs to be counted and recounted, it needs to be properly handled, and it needs to be secured at the end of the day. Because time and money needs to be invested in this, it proves a huge and unnecessary drain on resources for universities.
Reducing or even completely eradicating these wasteful processes can result in savings which can equate to £10 per transaction. So any university, regardless of size, can typically realise annual savings of several £100,000. For example, the cost of cash handling in its own right can equate to several percent of the income collection.
At the same time, by offering alternative payment options including via laptop, tablet and mobile devices (rather than in person), universities can also make the process much more convenient for busy students.
2. Ditch low value invoices
Invoicing is the bane of any finance department, and doubly so in universities, where the value of transactions is often low, and the expense of collecting the payment prohibitively high.
The simplest answer, then, is to ditch low value invoicing entirely (and that includes anything up to the £300 mark). By enabling students to pay up front, universities can streamline the whole process, while also improving cashflow, reducing debt, and freeing up time and resources to focus on mission-critical tasks.
3. Automate collection
Automating what you can is likely a sensible policy in most circumstances. Software systems can’t replace your best employees, but it can assume some of the more repetitive, time-consuming, and costly parts of their day-to-day activities.
Institutions often incur significant administrative costs in pursuit of outstanding debts. In some cases, this can outweigh the cost of the monies due, leaving them with the choice of either wasting resources chasing debtors, or default on the debt owed.
It’s something of a constant problem in education, but one that can easily be overcome. Technology makes it possible to automate this process – removing the issue entirely by ensuring debt is collected, time is not wasted, and mistakes are not made. If a university loses track of an outstanding debt only to discover it and enforce collection several years later, it can severely damage that student’s perception of the institution, and make them less likely to recommend the university to others.
The future of funding to the HE sector remains uncertain at best. What we can be certain of, however, is that universities can no longer rely on public sector financing. Instead, they must seek alternative ways to insulate themselves against cuts by reforming their inefficient processes and focusing on creating a consistently good student experience. Only then can they ensure a steady stream of fee paying students in and out of their institution.