Debtor Management in Schools

School Debtor Management

When managing outstanding tuition fees, there are generally two categories of parents:
(1) those who can pay and choose not to; and
(2) those for a range of valid reasons, cannot pay.

For those parents who cannot pay their tuition fees, schools have processes to work with those families. We at Cole School Experts define Debtor Management as the process of collecting outstanding tuition fees from families who choose not to pay.

Debtor management has a fundamentally different requirement from the schools other financial processes. Most of the other processes work within a cycle. For example, financial reporting is monthly, payroll is fortnightly and accounts payable is generally based upon a weekly cycle. Debtor Management has no cycle, it is a perpetual task. As such, there needs to be set short, medium and long term objectives in order to manage the process and measure success.

For the role to be successful, the person allocated to this process
(a) has some experience in the role
(b) wants to do the work
(c) has been given the necessary time each week to manage the process and
(d) has the required tools at their disposable to succeed in the process.

Where the employee is not comfortable with the role, they may carry it out, but in an inconsistent manner. A secondary issue which may have a negative impact is based around the perception that confrontation with parents will be part of the role. Whilst not true, the expectation will stop many people from pursuing the outstanding fees to the required level.

Cole School Experts has found that a successful approach to the parents should be polite, consistent and persistent with the aim of establishing a positive culture with both the current and future parents. That culture being that the parents understand and accept the need to pay their tuition fees in full and on time and it is their commitment in being part of the school’s parent community. The process should be conducted with respect and professionalism and under no circumstances should either party become defensive or belligerent.

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Finally, an important and non-negotiable requirement in achieving success as a Debtor Manager is that all stakeholders from the Business Manager to Principal and each member of the School’s Board must agree and fully support the process. Under no circumstances should a stakeholder undermine the process by making payment arrangements with parents unilaterally.

Where Cole School Experts can help

Many schools simply don’t have the experienced resource or the time to allocate to this work. Cole School Experts can provide both. We have a debtor management department of people who work with small, medium and large schools.

Our solution offers flexible options that are decided by the school. Each school can determine which family accounts they wish us to concentrate our efforts on, it may be 25, or it may be the full accounts receivable ledger. The school determines how many hours per week they would like us to spend working through their aged receivables ledger. That can range from a half day a week to three or more days per week.

One of the tools becoming increasingly available is software supporting the debtor management in the school environment. This is happening through the school specific finance software your school already uses or by integrating a software solution with your finance software. For example, FACTS is a powerful, flexible online solution that integrates to many of the school software packages and is proving a very effective and efficient support to both school finance teams and parents.

Find out more about Cole School Experts’ Debtor Management services.

Find out more about Platinum Collection Agency services.