Why Your School Doesn’t Need a Collections Service

5 min read


billing cartoon

billing cartoon
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The problem is that collections services are outdated and inefficient.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 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.

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 collections 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You’re Settling for an Outdated Business Model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.

email automation

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.

Why pay for a separate collections service when you have martial arts management software that features integrated payment processing and automated billing capabilities? Get your copy of our checklist, 9 Things Your Martial Arts Software Must Have to help you choose the right provider.

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About the Author: Kelli Sweeting

I'm Coach Kelli, a devoted CrossFit gym owner with 15 years of experience managing my facility, along with owning yoga studios and wellness centers. Beyond the fitness world, I have a passion for cooking, cherish moments with my children and family, and find joy in spending time outside. Having experienced the highs and lows, I'm dedicated to leveraging my expertise to help you grow and succeed on your fitness journey.