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Fee collection & debtor levels – The challenges & solutions for schools

Why do fee collection challenges exist for schools?

Historically many independent schools, especially faith-based establishments, have been less active to pressurise parents that are slow to pay school fees than other industries are to collect payments from their debtors. This is mainly due to the objective of maintaining a good relationship with the parent community to safe-keep enrolments, the availability of Government funding for students whether parents pay the tuition fees or not and the culture and policy of faith-based schools not to take legal action. Add to this continual economic pressures on Australian families with rising living costs and the expectation that a good quality independent school education is a necessity for your child’s future career options, and you have a cocktail of financial and social issues which a school’s financial team have to deal with in the collection of school fees.

What solutions are available to schools to address these challenges?

First of all, it is essential that schools communicate clear Enrolment, Fee and Collection Policies that state the school’s expectation and describe what parents must do to fit within that framework. This is the necessary foundation for effective fee collection later on. During the enrolment of the student, transparent communication of account information online in a user-friendly portal, giving easy and accessible methods of payment with a variety of flexible payment plans, is an effective method involving both the parent and the school Finance Team in an efficient process of the fee collection. If there are slow payers or families struggling financially, early action and frequent communication will ease the difficulties for both parties. The use of payment and tuition management software is fantastic for creating efficient automated solutions and outsourcing debtor management and collections is a great option when resource poor or for helping to maintain a good relationship between the parent community and the school. Good policy, systems and collaboration in the area of debtor management has a direct positive impact on cash flow and balance sheet viability.