Why Your School Doesn’t Need a Collections Service

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As a business owner, you have to be paid for your services. If you don’t collect the money that’s owed to you, you’ll quickly be out of business. You know this, so it’s not unreasonable to turn your billing and collections over to a service. After all, they’re supposed to be the experts at bringing in money that’s owed.

The problem is that collections services are outdated and inefficient. Just like you wouldn’t call a travel agent to book a flight from Denver to Phoenix, you don’t need an outsider harassing your students to collect your student agreement fees. Travel agents aren’t necessary now because we have access to more efficient and more affordable travel booking sites. And collection services aren’t necessary now because you have access to a much more efficient and affordable software driven solution.

To dive into this a little deeper, we’ll give you a few important reasons why you don’t need (and don’t want) a collections service.

You’re Wasting Money

As you know, services that offer full-service billing and collections make their money by charging a MUCH higher per transaction fee every time a student makes a payment. Most of the time the transaction fee is between 5-7%, but I’ve seen them as high as 10%. Using a student management software with integrated payment processing and automations drastically lowers your transaction rates. For example, using Zen Planner and our preferred payment processor, PaySimple, you’d get a rate of 2.19% per transaction.

To get a better picture of the money you’re losing using a collections service, compare the total amount of your student agreement fees collected at the two different rates. In effect, leaving a billing and collections service for a more efficient and effortless billing and collections system would give you a 5% annual raise. Or said differently, you’d collect more of the money you earned.

You’re Letting an Outsider Represent Your School (and Harass Your Students)

You work hard to build a positive and strong culture and community, so why let a stranger represent you and your school? With a collections service, you’re not in control of who is speaking to your students, nor what they say on your behalf. Throughout the years, I’ve heard many complaints about constant calls and borderline harassment from full-service billing companies. Since you do not hear the calls and conversations, you can’t know for sure how your school is being represented.

You’re Settling for an Outdated Business Model

Sure, in the past using a collection service was the best way to go, but technology has made those companies irrelevant and unnecessary. Student management software does the job of a payment collector automatically. It also provides constant insight into upcoming and overdue bills.

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When I worked at a school, missed payments were almost always due to an expired credit card. Even though we used an expensive billing company, those students would come in and happily update at the front desk. So why pay a company a 5% premium to do what software does automatically? Student management software notifies you and the student if a card is about to expire, so you’re both aware that they need to give you a new card number. The student can go into the system and add their new card number, or you can collect it when they come in. Once the new card is on file, payments process again, automatically and without any additional work. Since each student has a credit card in the system, there’s no need for a collector to make a phone call. Bills are paid automatically.

Student management software provides a full-proof system for billing, collections and payment processing, at a much lower cost.


Ready to learn more about Zen Planner’s integrated payment processing and automated billing capabilities? Schedule a demo with one of our Software Specialists today.

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jiu jitsu fighter chris mierzwiak

Chris Mierzwiak, Partnership Development Manager

Zen Planner

Since the first day Chris started training Brazilian Jiu Jitsu, it has been the main focus in his life. He believes that martial arts training provides valuable skills that people can translate to any other area in life. His goal is to spread those experiences and lessons to as many people as possible.

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