How do you deal with payments? I’ve been billing my students on the last week of the month, for the next month. Seems quite backwards, but I’m not sure how to do this! Do you do postdated cheques? Some teachers find that works well, but what if the student misses a lesson? Please just give me some ideas here, and tell me what works for you and why!
Over the years I’ve tried several different approaches and have now been using the same approach (which I love!) for several years. First of all, if you have not checked out Music Teacher’s Helper, you absolutely MUST do so! I’ve been using it now for about two years and it saves me so much of the time and headaches that were formerly a part of my bookkeeping efforts. MTH automatically bills families on the date you choose, allows you to set up a separate access code for each family so that they can check their payment record, amount due, etc. at any time, allows for on-line payment via credit card, and so much more! (You can read Review One and Review Two for more info.)
Anyway…on to a few specifics on how I handle billing. I charge a flat monthly rate that includes the weekly lesson plus all group classes and recitals. This amount is due at the first lesson of the month and is the same regardless of the number of lessons that month. I disseminate a calendar at the beginning of the school year indicating what weeks I will be teaching for the fall and spring semesters, plus I reserve the option of taking one additional week off each semester, if necessary. There are no refunds for missed lessons, but if possible I will offer a make-up lesson.
A handful of my studio families pay on-line, but most pay by check. I have heard of teachers allowing “postdated cheques,” but I think that is primarily a Canadian practice (at least I’ve never known any teachers in our area to use that approach). There are many different ways to handle payments (and hopefully some others will chime in with ideas!), but the key is to figure out what will work the best for you and your studio families. In my mind, the primary goal is to increase efficiency, streamline the process as much as possible, and provide great value for my students so that they always feel like they are getting their money’s worth!
Remember, if you have a question you’d like to contribute to next week’s Monday Mailbag, leave it in the comments below or send me an e-mail sometime this week with Monday Mailbag in the subject line!
I do similarly to what Natalie does. I take the number of lessons for the year, times my per lesson fee, then divide it by the number of months so that the “tuition” fee is the same every month.
For materials I set up a student account in which students deposit a set amount at the beginning of the year and then (since I buy most of the materials)I subtract as needed throughout the year. This includes any books, rentals and even competition fees. This way I don’t have to keep asking parents for money along the way.
This has streamlined my handling immensely!
How do schedule the right to take a week off each semester, Natalie?
I actually bill at the end of the month for the lessons already completed. This works well for me, because I do not charge for missed lessons (as long as I received 24 hours notice), and I don’t want to hassle with paying my students back for a lesson they missed.
Payment is due the first week of the following month, and after a grace period, penalties are added to the bill. I will keep the program you mentioned, Natalie, in mind in case my studio ever gets to big to handle with good ole carbon copies!
I have tried many things over the years and have found what works for me. I charge the same each month whether there’s 5 lessons or 3 due to a holiday. It really evens out (5 in Ocotber, 3 in December…) I offer a discount for payments recieved on or before the 1st of the month. It’s not a huge discount but nearly everyone has their check to me by the 1st, which makes paying my bills so much easier. Before, with payments due the 1st lesson of each month it was hard because I’d have families forget their checkbook (we’ve all had that happen more then we can count) then they might be sick the next week, so it could be the middle of the month before I was paid. I do have some families write several checks, postdated, at one time. I of course hold them until the 1st of the specified month, but it’s so nice to deal with bookeeping pretty much just once a month. Then I can focus on teaching. I do charge a registration fee in the Fall to cover recitals and the yearly incentive program. Students buy thier own books. Summer lessons are pro-rated. They can pay each time they come or pay for several at once and we just keep track as they come. I write reciepts, with carbon copies for my tax records. Sorry this is so long, hope it’s helpful to someone!
I’m NOT charging a flat fee per month, and really wish I was! Definitely will be doing that next year. I’ve also been charging out books as I purchase them for the kids. The annual materials deposit makes sense. As far as the incentive program and recitals, I’ve figured that into the tuition.
I wouldn’t bother with discounts for early payments. Their “discount” is not getting a penalty added for late payments. Or just move up your due date so that, for example, Dec. lessons are paid at the last lesson of Nov.
I bill my students quarterly by the number of lessons I will be teaching, no makeup or reschedule for missed lessons. It works out very well. I only have to worry about billing 4 times a year instead of monthly, a pain in the neck.
Hey Natalie! Well, I bit the bullet and signed up for MTH! I’m soo soo soo soooo glad I did. It’s everything you said and MORE!