Three Tricks When Completing the FVRA Tool

The Financial Viability Risk Assessment (FVRA) Tool requires careful planning and attention to detail. To make the process easier and more effective, I am sharing three tricks and advice to help you complete the tool confidently and accurately.

Three Tricks When Completing the FVRA Tool

Trick 1: Estimate New Enrolments with Reasonable Assumptions

When projecting new enrolments, it is essential to base your estimates on reasonable and justifiable assumptions. If you anticipate a significant increase in enrolments, provide a clear explanation. For example, if you have partnered with another education provider, this should be documented and reflected in your assumptions.

Actionable Advice:

Follow historical trends and use past data to guide your projections. If you are introducing new courses or expanding into new markets, ensure there is strong evidence, such as signed agreements with agents or market analysis, to support your estimates. This will strengthen your application and demonstrate that your projections are grounded in reality.

Trick 2: Reconcile Student Fees Receivable

One standard issue organisations face is discrepancies between their accounting software and student management systems. If student fees receivable are not appropriately reconciled, this can create confusion and signal financial mismanagement.

Actionable Advice:

Before completing the FVRA Tool, reconcile your student fee data between your accounting software and the student management system. Ensure that all outstanding balances, pre-paid fees, and revenue figures align. I recommend conducting regular reconciliations to avoid errors and ensure your financial data is accurate and up to date.

Trick 3: Monitor Financial Ratios and Compare them with Industry Benchmarks

The FVRA Tool heavily relies on key financial ratios, such as liquidity, debt-to-equity, and Earnings Before Income Tax percentages, to assess your financial health. Failing to monitor these ratios can result in a poor risk assessment.

Actionable Advice:

• Calculate these ratios carefully and compare them with industry benchmarks. For instance:

• A liquidity ratio should demonstrate that you can cover your short-term obligations.

• A strong debt-to-equity ratio reflects financial stability.

• Earnings Before Income Tax percentages show your ability to generate surplus revenue.

• If your ratios fall short of benchmarks, consider adjustments, such as reducing expenses or increasing cash reserves, to improve your financial position before submission.

• By using reasonable enrolment assumptions, reconciling your student fees receivable, and monitoring key financial ratios, you can complete the FVRA Tool with greater accuracy and confidence. 

Feel free to contact us for expert help with the FVRA Tool.