Why Do-It-Yourself Billing is More Expensive

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To illustrate, let’s use 10 percent in total fees as an easy number on the high end for tuition billing. If you could collect $10,000 without using the billing company, but the billing company could collect the same $10,000, no more or less, you might think you have a $1,000 spread. The truth is there are many expenses involved in DIY (Do It Yourself) billing. Your own time, energy, and hard expenses associated with playing bill collector quickly eat up that $1,000 spread. Here are just some of the hard and soft expenses DIY will cost you:

1. The software to track students (including annual upgrades).

2. The mailing expenses for late notices.

3. The time to run cards, send out late notices, call late students, audit payment histories, and so on ($50,000 annual wage = $24 per hour. Double that if you are earning $100,000 per year).

4 The loss of standing with your students when you wear one hat of the wise instructor and another hat of the bill collector.

5 The loss of students. A good billing company will help you retain students by providing improved customer service and by having a stronger contractual relationship with the student.

6 The reduction in actual collections because students are not as concerned about stiffing you versus a large billing company.

7 The reduction in actual collections because you are a green belt at collections, while the billing company is a veteran black belt at getting students to pay.

What does all of this add up to? It varies with the school, of course, but I wouldn’t be surprised if it were pretty close to that 10 percent mark. I give stress a high expense value. The real costs are in numbers three to five from the list above.

Playing accountant is not what you are good at, nor is it how you make your money. You will always make more by managing others than doing things yourself. A teacher nurtures, guides, and counsels students. A bill collector harasses people for money. These two roles do not mesh well. Your image as the nurturing, caring teacher can be ruined in an instant with one phone call or letter from you about missing money.

Finally, you may be a good black belt, but you are not as scary as a financial institution when it comes to deciding whom to pay. This is why big stores have their credit cards handled by outside firms. A good billing company will always collect more than you. They can be tougher than you, and it keeps you positioned in your community as a teacher, not a bill collector.

Even with the Martial Arts Teachers’ Association tuition at just $24.95 a month, I use a billing company to handle it. I am a teacher by nature, and that is where I want my efforts expended. I focus on writing, editing, content creation, program development, marketing, and member retention. I enjoy all of those tasks. I do not enjoy bill collecting.

You don’t hire a billing company to match your efforts. You hire them to exceed your efforts. This also allows you to focus on your core strength and responsibility as a school owner, which is creating and keeping students.

I presented the famed “Mr. Miyagi,” Pat Morita, with an honorary black belt. He has a lot of respect for the martial arts.

During dinner, he regaled us with stories of his days as a stand-up comedian. He called himself “The Hip Nip.”

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