I like looking up quotations on the Internet, just to see to whom they’re attributed. Both Benjamin Franklin and Charles A. Goodrich are credited with “A place for everything, and everything in its place.” Actually, Goodrich’s motto was first published as, “Have a place for every thing, and keep every thing in its proper place.”
When it comes to collecting revenue, it helps to have every thing in one place, as it is its proper place.
I’ve visited schools which use their local bank for parents who want to fulfill their tuition obligation through automatic debits. But the school must initiate the transactions. Parents have to remember that there will be a payment coming up, and if there’s not enough funds in their account to cover the transaction, an NSF fee could be charged to the parent because there wasn’t enough money in the account, as well as the school, because they attempted a payment on an account that didn’t have sufficient funds.
They also use a credit card reader, and, if they accept all four major credit card brands, the school absorbs the cost of the transaction. The costs range from around 2% for MasterCard and VISA, a bit higher for Discover, and anywhere from 4 to 7% for American Express. Because of these higher rates, some schools may choose simply to accept MasterCard or VISA, and even though the thought is that the school receives its funds, many faith-based schools hesitate to welcome credit card use since doing do could put a burden of debt on the family, and the school would have to find ways to absorb and offset the credit card company transaction fee. Further, in today’s world of Payment Card Industry (PCI) compliance, your school needs to make sure your payment provider is storing those transactions securely.
I’m reminded of a situation I experienced at a local oil change facility. The credit card machine they were using actually printed my entire credit card number on the receipt I had to sign, then it was stapled to my invoice. The clerk was going to put that invoice in a file folder which would remain on their service desk. I told the person behind the desk, “You know, if MasterCard or VISA came in here and audited your files, you could be cited for potential credit card fraud.” He told me that they just got the credit card machine, and didn’t know how to fix it. I asked for the invoice back and scratched out my credit card number from the paper tape. He called his manager over, who told me that it’s company policy that they store information that way just in case the transaction didn’t go through, and then they could retry the transaction. I’ve never gone back there – that practice provides a huge potential for credit card fraud.
Schools will also generate invoices from their accounting program, print them, and mail them to parents. Every month, the parent gets a bill, and the school hopes the parent pays it within a reasonable amount of time. The result – payments are brought to the school office, perhaps by cash or check, where they remain until someone can give it to another person to record the payment, prepare the bank deposit, and take it to the bank. This might be possible for a school with a limited number of students, but several hundred families paying how they want when they want without a centralized payment platform to coordinate it all is a significant time-waster, not to mention significant security risk, for the school.
Further, today’s parents of young children are on the move. They’re mobile. They take their cellphones and tablets with them, and want to make secure online payments.
Not only parents, but today’s administrators too. One school administrator mentioned to me that it takes her a complete day to pull report information from all the different sources to prepare for the monthly school’s finance meeting. Having such information at her fingertips would allow her to explain aging receivables, have access to demographics about their school in real-time, and save her at least 10 days of work which she could use to get to other things on her “do” list.
Then there are fees – and some schools have many of them.
Utilizing three different strategies which are disconnected, as well as still accepting cash at your school to pay for tuition and fees, isn’t making your life any easier. By using a tuition management partner, however, your families receive tuition payment options, the ability to pay fees and tuition payments on-line, and view payment history, changes made to the agreement, and upcoming scheduled payments. They can even receive email or text reminders when payments are due. And make no mistake – today’s Millennial parents EXPECT to be reminded of their payment obligations.
School administrators see information pertinent to their needs relative to total funds collected, cash flow and delinquency with aging, making report preparation a breeze, not to mention the ability to easily monitor the school’s financial health.
Using a tuition management partner allows you shift your energies, and go from chasing tuition to chasing enrollment to grow your school. But using one that puts your school in control of the process is paramount! If a parent calls a school and requests an adjustment to their payment plan, the last thing they want to hear is that you’ll have to call the company and wait until they get back to you…especially if that call pertains to a fee they received for a late payment, and they contend they paid their obligation on time.
If you want to know more about offering convenient payment options for parents at school, real-time information for your school’s reporting needs, and mitigating your school’s exposure to risk, visit this link for more details.
© Michael V. Ziemski, SchoolAdvancement, 2015-2019 (Original Publication Date: 20150321)