Populi Financial lets you manage your school's Receivables and Donations. "Receivables" are the charges and payments involved when your students pay tuition and fees, incur library fines, buy stuff in your bookstore, and so on. Donations are individual monetary gifts made to your school by donors (as opposed to someone paying tuition on behalf of a student). Populi lets you track charges, payments, and donations so you can incorporate that information with your general accounting package (which might handle other tasks like payroll, capital expenditures, and so on).
Financial has four components:
- Accounting, which contains a Chart of Accounts, General Ledger, lets you perform Journal Entries, and gives you tools to examine individual financial transactions.
- Billing, which lets you manage tuition, fees, and payment plans, and gives you reporting tools that track charges and payments.
- Financial Aid, which lets you manage financial aid awards, manage student aid applications, disburse and refund aid, and gives you reporting tools to track awards and applications.
- Donations, which lets you accept and acknowledge donations, communicate with donors, and run campaigns and appeals.
This overview covers the interactions among Accounting, Billing, and Financial Aid.
Populi Financial is based on double-entry accounting. Double-entry accounting is a self-balancing accounting method consisting of two-sided transactions that record where your money comes from and where it goes to. All financial events in Populi are tied to your Chart of Accounts, which is what you use to reconcile your Receivables with the rest of your school's finances. Accordingly, when you first set up Populi Financial, you start in the Chart of Accounts. The Chart...
- Forms the underlayment of the movement of money in and out of your A/R.
- Is the focal point of Populi Financial: your goal is to end up with accurate balances in your Chart.
Financial events (transactions) are tied to the Chart by associating tuition, fees, payments, financial aid awards, bank accounts, etc. with specific accounts.
- The "Accounts Receivable" asset account is built-in to your Chart (and cannot be removed—every transaction affects it in some way).
- Your "Technology Fee" of $50 is tied to income account "5100 - Tuition and Fees".
- The "Tech Scholarship" is tied to liability account "10000 - Tech Scholarship Fund".
- Your school's bank account is tied to asset account "0100 - General Checking".
Say you charge a student the Technology Fee: that increases the balance on your A/R and Account 5100 by $50 each. This means that you have an Asset (the student's obligation to pay you $50) which takes the form of $50 of Income to Account 5100.
Meanwhile, you award the student a "Tech Scholarship" of $50. You run a Journal Entry that increases the balances of Account 0100 and Account 10000 by $50 each. This means that you have an Asset (the funds from the scholarship) that is offset by a Liability (the obligation of those funds to pay the student's expense).
What happens when you use the Scholarship to pay the Fee?
- The balance in Account 0100 remains the same. The money already became a real asset in your bank account when you did the Journal Entry.
- Your A/R balance decreases by $50. With the Fee having been paid, the Asset of the student's obligation to pay is now gone.
- Account 5100 remains unchanged. You can still book $50 of Income to that account.
- The balance in Account 10000 is reduced by $50. Now that the Scholarship has been disbursed, the Liability you once had toward the student is now gone.
The end result? $50 has come in the door and you have an accurate record of how it got there.
For the day-to-day work of charging students and receiving payments, you'll use Populi's Billing system.
In Billing, you set up Tuition, Fees, and Payment Plans. Each of these are tied to system triggers (some built-in, some that you set up) that automate charges. For example, a tuition schedule generates a pending charge when a student enrolls in courses. Once you're set up and charges and payments start rolling in, you use the real-time reports in Billing (Pending Charges, Unpaid Invoices, etc.) to keep track of your ongoing financial activity and figure out what needs to happen next.
Charges begin in the Pending status, which means that they do not yet affect any account balances. They can be changed by hand or by events like enrollment updates, as well as be deleted. The one thing you cannot do with them is pay them—they do not affect any balances. To make the charges "payable", you have to invoice them. Invoicing creates a permanent record that the student owes you this much for these reasons.
The next thing an invoice needs to communicate is whether and how it was paid off. There are four ways to pay invoices in Populi:
- You record a payment (cash, check, whatever) on the student's profile (more below).
- You apply a credit towards the invoice.
- The student (or someone else) can pay online via credit card.
- A financial aid award can be disbursed in payment of aid-eligible charges (more below).
Invoices and payments create individual, unique transactions (as do other financial events, like refunds, credits, Bookstore sales, etc.). Transactions, technically speaking, exist at the Accounting level, and record the financial events that constitute an individual account's balance. Thus, your daily Billing activity can be reflected in your General Ledger and on your Chart of Accounts.
- You set up an "Undergraduate" tuition schedule that charges part-time students $650 per credit (less than 12 credits) and a flat rate of $9700 for full-timers (12-18 credits).
- You link that tuition schedule to all of your Undergraduate courses.
- You create a refundable "Lab Fee" of $150 for students that enroll in any Lab Science course; the above-mentioned "Technology Fee" is tied to the "Undergraduate" schedule.
Say you add a student to the Undergraduate program and he enrolls in six courses totaling 14 credits, including a 4-credit Lab Science course.
- When he's added to the Undergraduate program, that triggers the corresponding tuition schedule to be added to him.
- When he enrolls, the Undergraduate schedule triggers the $9700 flat rate; this, in turn, triggers the $50 Technology Fee.
- The Lab Science course, meanwhile, triggers the $150 Lab Fee.
Thus, his charges total $9,900, which you then invoice. The student now has a balance of $9,900, which is reflected in your CoA as $9,900 in A/R and income in "Tuition and Fees".
To get started setting up Financial Aid, begin here...
Financial aid refers to the processes involved when a student makes use of a grant or loan from a funding agency to pay her education-related expenses at your school. (It does not refer to payments made by a third party—say, a student's uncle—on behalf of a student.) A funding agency might be the Federal government, a state government, or a scholarship fund (among other possibilities). Depending on what kind of aid your school accepts as payment, the financial aid process might be pretty simple or rather complex.
Read more in the Introduction to Financial Aid.
2. Read about other financial basics in Populi