5 Tips for Working with Your Business Officer

5 Tips for Working with Your Business Officer

by Alex Heiberger, CFO, The Madeira School (VA)

A year ago I transitioned from the university administration world into the role of independent school chief financial officer. As I encountered many aspects of this position that were completely new and exciting, one element was completely expected— the importance of the admission office to the fiscal health of our school. The relationship between the admission director and the CFO is an important dynamic, and the key to establishing a successful recruit-admit-retain cycle. These roles rely heavily on each other for mutual success, and building these relationships takes time, commitment, and trust. Below are five tips for admission leaders that should help ensure powerful and productive teamwork with their CFOs.

  1. Know your stuff! The admission office staffers need to be subject matter experts on strategic recruitment generally, strategic recruitment specific to your school, and strategic recruitment specific to your market. A CFO may have an idea about these things, but rarely do we spend the time necessary to know what makes our students and families tick.You need to know this, and you need to teach us! This knowledge helps us understand what the numbers don’t convey and helps you train an extension of the recruitment team.
  2. Take an interest in the financial big picture (my stuff!). It is important to understand how tuition and, more specifically, net tuition revenue, fit into the school’s overall financial health. Certainly your overall recruitment strategy should tie in to the school’s financial plan. Your savvy parents may ask about the school’s finances, or it may come up as part of a conversation about your financial aid or merit scholarship programs. If this is not your strong point, a good financial leader will take the time to work with you. After all, we need allies too, and this goes hand in hand with #1.
  3. Own your budget. You are responsible for the school’s revenue pipeline. How you oversee your ship is important. Be entrepreneurial about it—aspirational, but responsible and credible. This is the only way to ensure you have resources commensurate with your recruitment plan. A good budget process is iterative, meaning you improve it over time towards your agreed-upon goals. So when planning, have a vision and a proposal when we meet, ask for what you think you need, and we will go from there. During the year, actively manage your expenditures and stay in touch as things inevitably get changed or adjusted…if it gets dicey, you are better off asking for help than forgiveness.
  4. Use data. Agreed-upon goals are a great first step, but they need to be supplemented by real, measurable, objective data. Agree in advance on what data are useful—their source and structure—and then use data to make decisions and evaluate results. Anecdotes are usually helpful in describing your admission strategy, but if real data doesn’t follow, one might question if you have a plan at all. When the business and admission offices use the same data, you know you are aligned. As an example, we created a net tuition revenue report by using what the admission team was already tracking in their data and combining it with a financial impact analysis.The result is an overview of enrollment useful in both offices, as well as in our reporting to the board. Since it was modeled after our recruitment goals, it is an easy measure of our ongoing progress.
  5. Respect the partnership and put it to good use. Like most relationships, this one is well worth the care and feeding of both regular and sporadic check-in meetings to make sure we stay in sync. Regularly challenging your approach and assumptions ensures you are keeping your recruitment plan fresh.The impact this teamwork will have when meeting with staff, board, leadership teams, parents, etc. is powerful.When we are speaking from the same plan, talking points, and presentations, the chance of mixed messages or conflicts are minimized. In addition, it’s nice to be on the same team. Share the successes together, but also know that you will be in the trenches together when things get tough.

The Admission-Business Office Partnership

Whether presenting together or individually, the CFO and director of enrollment management need to be aligned in their plans, data, and language around enrollment, especially in a time of change or when rolling out new initiates. At Madeira, we spent a significant time last year changing the way we focus on recruitment yield, from “head count” to “net tuition revenue” (NTR).

Madeira defines NTR as total tuition income minus financial aid expenditures. Financial aid expenditures include need-based grants and our merit program. Historically,the goal of the admission office has been to enroll a specific number of students each school year. Moving forward, the admission office will have a head count goal, but the primary goal will be to achieve Madeira’s NTR financial target. NTR can be greatly affected by payer mix, so careful attention will be given to the financial aid award process and how awards are stratified by amount.

Based on its performance during the NTR admission cycle, the school may then decide whether or not to employ a tuition discounting strategy. The purpose of discounting is to increase head count and secure additional revenue for the institution, when it is deemed beneficial to do so. The decision to employ discounting takes into account factors such as the grade of the student, legacy affiliation, and other factors that affect class composition goals.

NTR can be a complicated concept that asks for a new perspective from both the finance and admission teams—as well as from their associated board committees. So, once the finance and admission teams understand and agree with each other in person, they need to ensure they can articulate it to others. At Madeira, we incorporated the new paradigm into our respective meeting circles by sharing the joint plans and reports we created.

Joint Reports and Presentations

Title Format Delivered by Audience
Net Tuition Revenue (NTR) Data Report CFO, Director of Enrollment Management Board of Directors, Finance Committee, Admission Task Force, Administrative Team, Admission Team, Business Office
Budget Scenarios (based on NTR) Data Report CFO Board of Directors, Finance Committee, Administrative Team
NTR and Financial Aid Guidelines Presentation and Primer Director of Enrollment Management and CFO Admission Task Force, Board of Directors
Merit Program Snapshot Report  Director of Enrollment Management Admission Task Force, Board of Directors

 

 



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