Billing Methods for Music Teachers

Date Posted: 07/16/2010 | Category: Billing

Forward to a Friend

Show me the money. In this two-part blog, we’ll discuss two common billing methods used by music teachers and schools: Set Monthly Dues, and Pay As You Go. We’ll review the pros and cons of each and hopefully give you an idea of which method best suits your teaching business.

When choosing a billing method, you should always consider what is best for the student’s music education and progress. This week we’ll review the Set Monthly Dues method.

Set Monthly Dues

A bill is presented to each student at the beginning of the month for the total amount due for all the lessons scheduled for that month. This method generally works better for established and/or experienced teachers with larger enrollment.

Advantages

• Stable monthly income. It’s easier to know what your monthly income will be when each student is on a fixed monthly price. Even during slower months, you have a good idea of what you are going to make.
• Payment is made up front. You don’t have to work all month with the chance of not collecting your dues.
• Encourages greater commitment on behalf of students and parents. Typically less cancelled because students paid for all lessons up front.
• Billing is simple and saves time. One amount every month for all students.
• More notice when student quits. Typically students will notify you that they will be discontinuing lessons at the time they pay for their final month.

Disadvantages

• Possible enrollment barrier. New students and / or parents may be hesitant to pay up front each month for all lessons and you could lose that student to a teacher or school with a more flexible billing system.
• Refunds. Students and / or parents will at some point want a credit or refund for lessons not completed in the previous month, even if they agreed to that policy.
• Make up lessons. You will almost always have them. That means a certain day of the week or month will have to be reserved for make ups.
• Higher turnover. Students and parents can become disgruntled by paying for lessons not completed and may be more likely to quit than students who Pay As They Go.

Keep in mind that once you have established a billing method, it can be very difficult to get existing students to switch to a new payment routine. In next week’s blog, we’ll look at the pros and cons of the Pay As You Go billing method.