Effective Practices : Finances
After Care Billing
Finances Section 4
1. Does your school provide after school care for students? If so is there a separate charge for this service in addition to tuition?
2. How are charges for after school care calculated? Do you use a flat fee, an hourly rate, a block rate or another system?
3. Who is responsible for calculating the charges due for after school care, and with what frequency are these charges calculated and billed?
4. Describe the key elements of your school’s philosophy in relation to the financial aspects of the after school care program?
5. What about your method of billing and collecting for after school care charges is particularly effective?
6. If there were something you could change in relation to your school’s billing and collecting on charges for after school care, what would it be and why?
Does your school provide after school care for students? If so is there a separate charge for this service in addition to tuition?
After school care is provided in the majority of Waldorf schools surveyed. Only one school in the survey does not provide care after the regular school day ends; this school would like to provide the service but has not had sufficient number of children enrolled in the program in the past to cover the costs of the service and the additional wear on the teacher’s classroom in which the program is housed.
All of the schools providing after care charge a fee in addition to tuition for participation in the program.
How are charges for after school care calculated? Do you use a flat fee, an hourly rate, a block rate or another system?
A variety of approaches are used to bill parents for after school care program charges. The approaches used for billing are a reflection of two things - the specific program offered at the school and a desire to offer a safe, appropriate program at a cost that is at breakeven for the school.
Traditional Usage Based Billing
Some schools use a traditional approach to billing in which students are signed in and out of the program each day, and parents are billed based on usage. Usage is typically calculated in 15 minute or half hour increments, with rates of $5 to $6 per hour being typical. The rate charged for after school care is typically market based. Some schools charge a higher rate for children in the early childhood area, reflecting the higher costs of staffing such a program.
Tiered Rate Billing
This usage-based approach to after care billing has a significant disadvantage for the school - the calculation and preparation of supplemental bills is time consuming and expensive for the school business office. One school surveyed has devised a unique alternative which minimizes this problem. This school has found that the majority of parents use the after care program on a very predictable basis that mirrors the parents’ work schedules. In cases where a family can predict its usage at the beginning of the year a calculation is made at $5.50 per hour. Parents can elect to be billed monthly or to have the after care amount added to their monthly tuition payment. Parents who are unable to predict their usage but who want to use the service on a drop-in basis may do so, but they are charged $8 per hour. The primary benefit of this approach is that the usage of after care becomes much more predictable, helping to ensure that appropriate staffing levels are in place each day. The higher rate for drop-in use also offsets the expenses associated with the calculation of bills for irregular use.
Vendor Based Programs
A very different approach is used at another school surveyed. This school allows outside vendors to come onto campus and to offer semester long after school programs to their students. These programs are designed for students in 1st through 6th grade, and cover a variety of special interests such as drama, rock climbing, arts and crafts, dance and chess. The programs may meet once, twice or three times a week. Students sign up for the entire semester and pay the outside vendor directly.
Because this school has transferred a significant number of its students into programs run by outside vendors it is able to also offer a very small, Waldorf inspired rhythmic after care program to a maximum of 15 children a day in grades 1 through 4. Parents sign their children up for this program in advance for a minimum of two days a week. The standard rate for this program is $35 per day with tuition assistance available to those receiving assistance on their tuition. The lowest rate charged is $10 per day, with daily charges of $20 to $25 being in the midrange. Faculty children are billed at the $10 rate. Parents are billed in advance for the upcoming month.
Who is responsible for calculating the charges due for after school care, and with what frequency are these charges calculated and billed?
The schools that use traditional usage based systems typically have a sign-in sheet in the after school care room. Students are signed in by after school care personnel. Parents sign the student out, noting the time of departure and signing the sheet each day. These sign in sheets are given to a member of the school’s business office staff and bills are prepared once a month. These invoices are typically mailed in the first week of the following month. The business office associate also posts the income to the school’s books.
The school that uses the tiered rate system also employs spread sheets on which students are signed in and out. The majority of students are on the block rate plan, and their fees are calculated prior to the start of school and included in their monthly tuition payment. No credit is issued for days not used, but the after care personnel do have the authority to allow a student who was sick on one day to make up the time on another day. Monthly bills are only created for students who are using after school care on a drop-in basis. A member of the school’s business office staff calculates the billing amounts for both tiers, books the income, and sends monthly bills as necessary.
In the school with a large number of vendor based programs the billing is handled by the vendor. Parents are billed monthly in advance for the small Waldorf-based program operated by the school; this billing is handled by the manager of the after care program who also provides copies of the bills to the business office so revenue can be booked. Payment checks come first to the after care manager for posting to individual parent’s accounts, and are then forwarded to the business office for deposit. Parents who do not pay receive a follow up phone call or email from the after care manager. In cases where an account is in arrears at the beginning of a new month the child may be barred from entering the program.
Describe the key elements of your school’s philosophy in relation to the financial aspects of the after school care program?
All of the schools surveyed indicated that the billing for after care must cover the cost of operating the program. None of the schools currently view their programs as a source of additional revenue for the school. Schools indicated that they wanted the after care program to be inexpensive enough that the children of working parents could attend on a regular basis rather than facing the prospect of being home alone or of being shuttled from place to place until a parent is off work.
The small Waldorf-based program notes that it is not designed to be an occasional drop-off program. The school expects parents to make a commitment to this program, and for this reason bills parents in advance.
What about your method of billing and collecting for after school care charges is particularly effective?
One school that uses a traditional usage based approach to billing noted that it has a very good Excel program for doing the billing. The program is able to import names and addresses from the school’s billing master file. The business office enters the beginning and ending time for each student and the system calculates the costs. The system can even accommodate separate bills for parents with split custody and payment responsibilities for a child.
Another school that uses a traditional usage based system notes that having parents sign the children out each day eliminates most arguments about the after care charges.
The school with the tiered rate approach notes that the reduced rate block billing system works well, especially due to the resulting ability to bill parents through FACTS, the school’s tuition payment service.
The small Waldorf-based program requires parents to sign a contract at the beginning of the year which indicates clearly what the charges will be. Then as each month approaches an email reminder is send about the amount due. Delinquencies are rare, but when they do occur a student can no longer participate in the program.
If there were something you could change in relation to your school’s billing and collecting on charges for after school care, what would it be and why?
Some schools noted that they regularly receive calls from parents outside of the school asking if their children could participate in the after care program. None of the schools surveyed currently allow outside students to participate, but the question about the appropriateness of opening up the program to more students keeps arising.
Schools also are asking questions about their after care programs relative to the school’s overall revenue strategy. Some schools wonder if a strong after care program during the school year could be the springboard for a large summer camp program which could have significant positive revenue implications for the school.
Schools that use a traditional usage based billing system find the billing to be quite a time consuming chore. It seems at times that there are as many calls about after care billing as for all other bills combined.
One school that uses a traditional usage based system allows students to sign in and out for instrumental music lessons offered by school music teachers. Also, parents whose children use after care while they work as a committee member are not billed for services during these volunteer hours. Keeping track of these billing exceptions is another issue that makes the billing for after school care a real challenge.