Best AR Solution Highly Commended: Pontian Pei Chun Chinese Schools

Published: Apr 2021

Tan Ah Tong

Pontian Pei Chun Chinese Schools

The Pontian Pei Chun Chinese Schools (PPCCS) has a 90-year history and is one of the oldest Chinese Schools in Pontian, Johor in Malaysia. Pontian Pei Chun Chinese School not only inherits and continues the traditional Chinese culture, but also strives for innovation.

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School in Johor educates parents on a new way of paying school fees

The challenge

PPCCS is financially self-sufficient and no longer carries out fundraising to sustain its operations but it is imperative that PPCCS is able to generate funds within its means and continues to seek ways to operate more efficiently. Being the oldest Chinese independent high school in the rural areas of Pontian which is close to 70km away from the state centre of Johor Bahru, it is all the more crucial for PPCCS to enhance its receivables and payables processes, especially for school fees collections and supplier payments.

Being a small town, 80% of parents are more comfortable with paying school fees using cash, with the remainder using cheques and online banking. For the cash and cheques received, PPCCS needed to physically deposit them at the nearest bank.

Reconciliation is a manual administrative task. With the different means of school fees collection and payments; cash, cheques, and online banking, PPCCS faced an arduous task of manually having to reconcile the collections at the beginning of every semester.

Maximising earnings is vital for self-sufficiency as any shortfall of funds is personally funded by the board of directors. Not having access to online banking meant that PPCCS had to resort to the monthly account statement provided by its banks. If it needed to know its balance at any point in time, PPCCS had to call the banks. This meant that PPCCS did not have a real-time view of its cash position, preventing it from managing its cash flow more efficiently.

For the school, cheque issuance was still the preferred method for payments such as payroll and utilities. Not only was this time-consuming, it also created unnecessary administrative workload.

The solution

Fully grasping the challenges that PPCCS faced and strengthened by a deep sense of moral responsibility to the local community, UOBM has customised a set of solutions to assist, as well as improve overall efficiency.

For PPCCS’ receivables, UOBM has implemented UOB virtual account. A range of virtual account numbers, referencing student IDs, is assigned to each of the 1,600 students. School fees are then made to the student ID numbers, which can be transacted through numerous channels such as online funds transfer, cash deposit and cheques. An estimated amount of MYR600,000 is collected each school semester.

As of today, approximately 70% of the school fees is collected via the virtual account solution, and the balance is still via cash, due to some parents still using cash as their preferred payment method.

The bank statement contains the virtual account number and the accompanying reference number for ease of reconciliation. As a value-added service, in collaboration with PPCCS, UOBM has crafted communication materials in the form of flyers to communicate to the students on how to pay their school fees to their student ID.

Best practice and innovation

PPCCS’ direct engagement with the parents received encouraging feedback and the necessary buy-in from them. Understanding the parents were still very new and unfamiliar with online banking, since the implementation of the virtual account solution in July 2019, the bank has been diligently assisting PPCCS and the parents whenever they needed help making school fees to the virtual account numbers.

These initiatives are not only beneficial to PPCCS, but also to the local community of Pontian.

Key benefits

  • Effective management of cash flow.
  • More efficient administrative operation.
  • Journey towards total e-payment.
  • Greater accessibility for real-time position of accounts.
  • Capability to generate interest on otherwise idle accounts.

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Lucas Chew

Head of Transaction Banking
UOB Malaysia

At UOB, we ensure that we provide the right solutions to meet various aspects of our clients’ financial needs. Through the cash management solutions we developed for Pontian Pei Chun Chinese Schools, we helped them to gain better visibility of their incoming funds and cash positions. This has enabled them to manage and to forecast their cashflow more effectively. They also used our account receivables solution to automate their reconciliation, saving considerable time and resources. In addition, we worked with the school to conduct workshops to help parents understand the convenience of online banking solutions, contributing our effort to help the local community progress to a cashless society.

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