Managing Debtors in Fee Paying Schools

There are few industries that have the complexity of collecting monies owed as Independent and International Schools due to the relationship between the child, parents and who pays the bill.

WCBS Sales Director, John Cannon talks us through the implications, and explains why specialist software works

Schools are centred around pupils. In a straightforward relationship we have a school which provides a service (education) to a child that is paid for by a parent. This starts to get complicated when the bill is split between multiple payers. There are many reasons why this may occur, such as an employer pays the fees, a family arrangement or where parents have separated and are jointly funding their child’s education.

Many systems on the market including those from MIS specialists will do a reasonable job of generating a fee bill. However, generating the bill(s) is just one aspect of the process affected by the Pupil/Parent relationship; we also need to consider how the debt is then managed for credit control purposes.

The simplest relationship in a school is where a parent pays the bill, but this still has the Pupil/Parent relationship as an extra dimension which is why a system that manages the end-to-end billing process in one place is a must.

Looking at this further for a school we need to consider the additional complications that occur when multiple people pay the bill of how the debt should be viewed.

Where a bill is generated and a separate accounting package for sales ledger is used, integration is poor as they don’t reference the pupil and checking must be done across two systems. This is not how integration should work.

Balances should be available at Parent Level and Child level. For a £6,000 bill split 50/50 between two bill payers each parent will have a debt of £3000 and the total amount outstanding for the child would be £6000.00. Specialist software such as WCBS’ Billing module allows the school to view outstanding amounts from a child’s perspective i.e., how much is owed in respect of that child, or a bill payer perspective i.e., how much does that individual or organisation owe to the school.

One popular feature in the WCBS system is to show an outstanding balance on a bill and with two systems there is often no compatibility in this area meaning existing balances simply cannot appear, losing an opportunity to assist in debt collection.

Where a commercial sales ledger is used it is also difficult to identify different groups of pupils in school so reporting on debt on a section of the school or year group is often tricky if indeed possible, needing lots of manual effort and intervention.

The ease of access to data and the management of the unique relationships seen in schools are two of the many reasons why independent fee-paying schools choose a specialist software solution such as that offered by WCBS to manage billing in their schools.