How can I get my students to pay me on time?

All self-employed teachers like to get paid. So, what can you do to make sure that your students pay on time and how do you handle a student who has not paid his bill?

We have found that the easiest way to make sure your students pay on time is to ask them to pay in advance. If you are working with individual students, ask them to pay for multiple hours at once. When we first started our business, we would sell “packages” of 4 or 5 hours. Eventually, we expanded this to packages of 12 hours.

Next, you should consider using a very simple contract. A business attorney can help with this. Of course, “contract” sounds ominous. Perhaps you can call this your “terms and conditions.” In the terms and conditions document, tell the student 1) How much they have paid, 2) What (how many lessons) they are getting for their payment, and 3) What happens when they cancel a lesson. (I will cover cancellation policies in a future post.) Have the student sign and date the terms and conditions and give him a copy. Keep the original. (I think this is a good place to insert our disclaimer. Please read it. It is important.)

Now that you have the student’s money and he understands and has agreed to your cancellation policy, there should be no more issues. If the student does not show up for his lessons or if he leaves the country and you never hear from him again (it has happened to us), you have already been paid. Plus, if the student has already paid you, he is more likely to take the lessons seriously.

If your customers are companies rather than individual students, you will probably have to have a contract. This is a bit more complicated, but the idea is the same. Again, a business lawyer should be able to help you with this. Companies do not typically like to pay in advance because they assume all of the risk. (What happens if you disappear before you finish their program, for example?) However, you may have luck getting them to pay in thirds or halves. This is common in consulting. 50% payment up front, 50% payment on completion of the project, for example.

What if you did not have your student pay in advance and you do not have a cancellation policy? How do you handle a student who has not paid his bill?

In most cases, if this is an individual and you have an upcoming lesson, I would probably still meet him. When you meet, consider giving him a copy of the overdue invoice and reminding him that he needs to pay you before your next meeting. Thank him for his business then move on with the lesson. If he still has not paid you before the next lesson, I would hesitate to meet him again until he pays. Of course, this can be tricky if he owes you a lot of money, because you may never see him–or your money–again.

Another option is to call or email the individual before your upcoming lesson, remind him that payment is due, and ask him to bring his payment to the lesson. Sometimes, just the pressure of meeting you will be enough to get a student to pay.

Whenever you pressure a student for payment, however, you do risk damaging the fragile teacher-student relationship, and you may lose his or her future business as a result. (Of course, if he doesn’t like to pay, you may be better off without his business.) However, if all of your students fail to pay you, you will eventually go out of business. Or starve. Or both. This can all be avoided with terms and conditions and payment in advance.

For large companies, you will probably want your contract to spell out what happens if there is no payment or late payment. (Again, ask your attorney to help with this.) In my experience, lack of payment or late payment from a company is often the result of slow procedures/approvals or of someone forgetting to submit your invoice to the accounting department. In this case, a simple follow-up email to check the status of your invoice may be enough to expedite the payment.

If you have other suggestions for getting students to pay up, please leave them in the comments below.

Posted in Operating Your Business

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