Improve Your Student Billing Process

Are you struggling with an inefficient student billing process? You are not alone. Many educational institutions face the challenge of balancing customer service with bottom-line concerns. But what if there was a way to streamline the process, reduce errors, and improve cash flow?

In this blog post, we’ll explore how you can enhance your student billing process from the moment a student enrolls to the final follow-up. By the end, you’ll have actionable insights to make your billing system more efficient and effective, ensuring a smoother experience for both your staff and your students.

First you must define the billing process itself. Without an understanding of each step, there will be no framework for improvement. By its nature, billing is complex and difficult. The process starts from the first time you meet a student—whether through an online application or a campus visit—and it continues throughout the student’s time at your school.

Here are five steps you should evaluate to improve your billing process.

1. Start at Enrollment

The billing process begins with a student’s application for enrollment. Capturing information completely and accurately is the most important step in the process, as incorrect address or biographical information renders everything else moot. This is why having your enrollment management system integrated with your tuition and billing software is critical.

An integrated solution means enrollment contracts feed directly into your billing system—accounting for any financial aid awards—automatically populating student account information and reducing the chance of human error. When that system is a true accounts receivable subledger, your business office spends less time on manual data entry and you have one reliable source of information, with any updates reflected across offices.

2. Determine Billing Schedules

Once you have their account information, the business office must understand the schedule for billing this particular student’s charges. Although schools may offer several payment plans—the most common being one, two, and ten payments—placing the student on the correct billing schedule immediately encourages on-time payment and sets the groundwork for the institution’s cash flow forecasting.

Best practice is having an online portal where the student or family can select the payment plan best for them from a list of options the school configures. Then that selection automatically sets up the payment schedule in your billing software and the system sends payment reminders when charges are coming due. This alleviates your business office’s workload, gives the payer a sense of autonomy, and helps reduce tuition delinquency.

Your tuition and billing system should also allow the business office to split charges by any percentage or by specific fees to accommodate divorced parents, extended family members, or others contributing to the student’s education. Ideally, they each would have a unique portal login to see their personalized billing.

3. Capture and Bill Charges

The school must then begin capturing every charge relating to the student’s time on campus. Of course, the primary charge will be tuition, but financial aid and scholarships must be applied—if relevant—and any secondary charges such as meal plans, bookstore items, uniforms, lab fees, and other miscellaneous items must be charged accurately.

The best tuition and billing systems also allow batch charges, where the business office can apply fees to groups of students or teams based on lists imported from the Student Information System (SIS) or uploaded as a spreadsheet.

In an integrated solution, the school could also configure the system to place a hold on delinquent student accounts, preventing course requests or new enrollment contracts when there are past due balances over a certain amount. 

4. Manage Receivables

Once the bill goes out, the system should apply corresponding payments received against the student’s outstanding balances. Managing receivables often becomes a matter of data entry at this point, which can take significant time.

You can expedite the process and improve accuracy by having your tuition and billing software act as an accounts receivable subledger to your general ledger, automatically applying credits to each student’s account when they make payments. This means your financial reporting is always up to date and the business office can see real-time cash flow and delinquencies.

5. Follow Up

Finally, any outstanding items require diligent follow up. This is where the right personalities in the business office can make the biggest difference. Following up on late payments takes compassion and tact. In some cases, you may need to coordinate a new payment schedule or—if the student’s financial circumstances have changed—see if there is the potential for a mid-year financial aid award.

Some schools outsource the follow-up process to alleviate the hassle of collections and free their staff to do more strategic work.

Why Improve Your Billing Processes

Schools are in the business of providing an education. In return, they charge tuition. The accurate billing and collection of this tuition drives revenue for the school and ensures its long-term sustainability. But a more efficient and effective billing process has additional benefits.

For starters, it can lower the cost of doing business. Using electronic billing, for example, reduces the amount a school spends on paper, postage, and envelopes. Having automated reminders and a robust payment portal can cut down on staff time required for collection and thus increase their efficiency.

Another often overlooked benefit is improved relationships with families and students. By having a well-documented, consistent, and fair process, each stakeholder will have a clear understanding of what is expected of them and how to make their payments. If the payment portal is intuitive, mobile-friendly, and has automated notifications, they will be more likely to use and appreciate it as an intrinsic part of their educational journey.

By collecting more miscellaneous charges through the same online portal where students and families pay tuition, the school will increase its revenue. An integrated system also reduces tedious day-to-day tasks and manual processes.

And, of course, improving the timeliness of collections will improve a school’s cash flow. The faster the money comes, the more valuable it is to the school. Money today is always worth more than money tomorrow.

Improve Your Billing Process with Blackbaud’s Solutions

If you’re looking for industry-leading tools to help improve your billing process from enrollment to graduation, check out Blackbaud’s K–12 solutions for private and independent schools or Blackbaud’s Connected Campus for higher ed.