Recording a bursary that reduces a learner's fees
How a school records a bursary or scholarship that covers part of a learner's fees, before or after the fee invoice goes out, and what families see.
By Achekam · · 4 min read · For Education businesses in South Africa, Nigeria, Kenya
The bursary committee meets in the second week of term. By then, the fee invoices went out a month ago, several families have paid their first instalment, and one learner's mother has phoned twice to ask why her statement still shows the full fee when the school promised a bursary in December.
Bursaries and scholarships are good news for families and a recurring headache for the finance office, because the decision and the invoice rarely happen in the right order. This article explains how a school, college or training institute in South Africa, Nigeria or Kenya records a fee reduction cleanly in Achekam, whichever comes first.
Bursary granted before or after invoicing
The timing decides the method.
Granted before the invoice is issued. This is the easy case. An invoice in Achekam starts as a draft, which can be changed or deleted. Build the draft for the reduced amount the family will actually owe, and say in the line description that the fee is shown net of the bursary, with the bursary's name or reference. Issuing the invoice then takes the next number in the sequence and posts the reduced amount to the ledger.
Granted after the invoice is issued. Once issued, an invoice is in the ledger and in the family's statement. You do not edit it. You reduce it with a credit note, as described below.
To make the second case easier, set fee invoices up with separate lines for tuition, boarding, transport and other charges. A bursary often covers one component, such as tuition only, and separate lines let you credit exactly that component.
A credit note for the bursary portion
A credit note in Achekam is always issued from the invoice it corrects, either in full or for chosen lines. It posts to the ledger, can be downloaded as a PDF or e-mailed, and any credit left over after reducing the invoice is held for the customer.
For a bursary awarded after invoicing:
- Open the learner's fee invoice for the term.
- Raise a credit note against it for the line or lines the bursary covers.
- In the credit note's description, name the bursary and the committee decision that awarded it.
- Send the credit note to the family with a short covering note.
The credit note uses its original invoice's date and tax codes, so whatever tax treatment your fees carry is reversed on the same basis.
If the family has already paid more than the reduced fee, the extra sits as credit on their account. Decide with them whether it stays there for next term or is refunded; how overpayments are handled is explained in overpaid fees and leavers.
Why a bursary is not a bad-debt write-off
It is tempting to deal with a bursary by writing off part of the debt. Achekam allows an unpaid debt to be written off once a partner approves, and the result on the family's balance looks the same. The meaning in the books is quite different.
A write-off says: this money was owed, and we have given up hope of collecting it. A bursary says: this money was never going to be charged, because the school decided to reduce the fee. ACCA explains how credit sales create trade receivables and how irrecoverable debts are accounted for in its article on trade receivables and revenue; a bursary does not belong in that category.
Recording bursaries as bad debts makes the school look worse at collecting fees than it is, hides the real cost of its bursary programme, and muddles any report a governing body or funder asks for. Keep the two apart: credit notes for bursaries, write-offs only for genuine bad debts.
Voiding is a third tool, for a different purpose. An administrator can void an issued invoice that has no payments or credits, which reverses its journal. That suits an invoice issued in error, not a fee that was correctly charged and later reduced.
Bursaries paid by an outside sponsor
Some bursaries are not reductions at all. A company, a trust, a church or a foundation agrees to pay part of a learner's fees, and the school still receives the full fee, just from two payers.
Treat that as a payment question, not a discount:
- Sponsor pays against the family's invoice. Record the sponsor's payment as a receipt against the learner's invoice. A part payment leaves the invoice part-paid, and the family owes the rest.
- Sponsor is invoiced for its share. Where the sponsor wants its own invoice, invoice the family for their share and the sponsor for its share, as two customers. This keeps each payer's statement clear, which sponsors with their own auditors usually prefer.
Agree with the sponsor in writing which approach it wants, before term starts. A receipt can be re-allocated later if a payment lands on the wrong invoice, but it is easier to get it right first time.
What the family's statement then shows
Achekam's server produces a customer statement of account as a PDF that can be e-mailed, and the screen says whether it was sent. After a bursary credit note, the family's statement shows the original fee, the credit note for the bursary and any payments, so the balance they owe is plain.
That statement answers the phone call in the opening paragraph. Send it, with the credit note, as soon as the bursary is recorded. For families paying the remaining balance in instalments, see fee instalments and part payments.
A bursary routine for the finance office
- Ask the bursary committee to decide before invoices are issued wherever possible.
- Invoice net of bursaries already awarded.
- Use credit notes, never write-offs, for bursaries awarded later.
- Invoice sponsors separately where they ask for it.
- Send the family an updated statement every time.
Before the next committee meeting, agree with its chair the date by which decisions must reach the finance office, and set it a week before invoicing.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
