Do any of you collect post-dated checks at the beginning of the year for tuition payment? I just heard of this idea today and thought it was very interesting!

I just collect payments at the beginning of each month and require them to be in my possession by the 15th of the month. How nice would it be to collect all checks, post-dated for the 1st of each month at the beginning of the year, and not have to worry about it anymore!

Does anyone collect tuition this way? Is it as great as it sounds?

There are a couple of teachers here who do this. I see no reason it wouldn't work. However, you still have to bill music, events, etc., so I don't know how much work you save.

It is illegal in some states, however.

As a consumer I would avoid any teacher who wanted to do this, not because Im not good for it, but people make mistakes and if you deposit a few or all by accident then I get hit with charges... no no no

As a parent, I would have misgivings about such a request. First, as minniemay notes, writing a postdated check is not legal in many states (maybe all?). Second, it conveys a lack of trust that I would find discouraging, or it implies that I am such a ninny that I cannot be counted on to pay my monthly bills on time.

Maybe one way to broach this is just offer it as an alternative for families "for their convenience" but not press the issue if they choose not to do so. But then you'd have the headache of trying to remember which families you have checks for.

I think this concept of post dated checks comes up when we're dealing with people who forget to pay. I would be uncomfortable giving post dated checks...because people do make mistakes and no one wants the risk.

I decided this month that for anyone who forgets, I give them my card (with my address on it) and tell them to drop the payment in the mail. This idea came to me after one parent forgot to bring payment for 2 weeks in a row. And it worked. This way they have no excuse of not having the checkbook with them etc.

I think that collecting your tuition for the semester would be better. For those that can manage it, you get a lump sum at the beginning and not have to collect from them again until 4-5 months are over. It could really cause problems because think about it: if you had written 4 post-dated checks, how would you balance your checkbook? Would you always look like you were in the red, and then have to add back in the checks that hadn't yet been cashed? What a pain! And if that person happens to not be so great and balancing their checkbook, then you run the risk of having to collect from them anyways once the check bounces, in addition to collecting NSF fees.

Things to do instead:

-Have a late fee. Make it substantial enough so that they will want to make sure the bill is paid on time.

-Call up parents who have not yet paid the day before the late fee would be assessed to remind them of it. They will usually make an effort to avoid the late fee.

-In combination with a late fee, if a student has not paid by that deadline, also cease lessons until they are paid up. This should be given to your students in a written policy in advance so they are aware of it.

-Send out invoices in plenty of advance notice. I send mine around the 15th of the month for the following month's lessons. I make the due date their last lesson of the month so that there are never lessons received that are unpaid for. This doens't always work, but it has helped to reduce losses.

-Accept Paypal payments. This is more of a convenience, and while there are small fees involved, I consider those fees saving me time driving to the bank and making out deposit slips, and of course, peace of mind. There is no upfront cost to set up a Paypal account, and you only pay a percentage of the amount paid to you. This percentage happens to be less than you'd pay if you accepted credit cards directly, by the way. Paypal allows the client to pay with a checking or savings account if they already have a Paypal account set up, or anyone can pay using a credit or debit card. They can even set up the payment to be a recurring monthly cost if they so choose.

-Lastly, DO NOT BE AFRAID TO ENFORCE YOUR POLICY! I always hate making those calls, but they are necessary. I deserve to be paid for my time as agreed, and chances are they are more embarrassed that you have to call them than you are. You should be nice about it, of course, and understanding of circumstances that arise, but never be afraid to ask for payment.

One related warning.

In the state of Florida accepting a post-dated check is considered to be
extending credit to the person issuing the check.
If it bounces you're on your own.

A friend of mine accepted a post-dated check for some jewelry she sold to a dealer, it was after 4:00 and the banks were closed so she thought it was ok to do.

It bounced. By the time she knew this (a few days), the "dealer" was gone, storefront empty. She called the Attorney General office, when they found out it was "post dated" they said there was nothing they could do.

I realize this is unlikely to be an issue with piano lessons but I thought it was a good opportunity to let people know it can and does happen.

That does not mean it's unenforceable, however. Even if you extend credit to someone, you are entitled to actually receive that payment. But it is no guarantee that you will get paid and that it will make things easier, that is true.

True, but you will not get any help from the police or the Attorney General.
You are on your own because you chose (even unknowingly) to extend credit.

Perhaps it is different in this case because the person is not conducting a business. We have extended credit to people in our web business, and have very easily enforced it with help from authorities. As a teacher, I know I can enforce collecting money for lessons received and not paid for (i.e., credit extended). However, it would depend on the state as to whether or not post-dated checks are considered legal or honorable.

Huh... I think I was wrong when I said that post-dated checks are illegal in many states:

http://www.coveringcredit.com/business_credit_articles/Credit_Technique/art256.shtml

Interesting! I swear I learn something new every day on this forum, and not always about piano.

That's interesting about bad check laws, and perhaps that is what happened in that other example.

I began adding a late fee after the 15th of the month because I was getting too many people paying late all the time. I began enforcing it because I felt I was a charity case letting them pay late. I'm realizing that people, on purpose, forget, many times to pay on time. I thought I was going to lose students because of the late fee. However this is not true. I see the students and their parents every week. My late fee is not excessive but I need to pay bills like everyone else. I began enforcing this policy change since last year and I had many of the same people still being late all the time once in awhile.

Paying tuition on a quarterly basis would cut down greatly on overhead. A modest discount to acknowledge the economy could be appropriate.

I charge an annual tuition and parents are welcome to pay it in full at the beginning of the school year, by semester or in 12 monthly installments. This year I had one pay for the year, 3 pay by the semester and the rest are paying monthly. Sure makes my bookkeeping simple!

Thank you all for the great points! I do enforce a late fee, and send out invoices several weeks ahead of time, and e-mail reminders, and even post reminders in the studio around the beginning of the month - but still, I have parents who "forget their checkbook" or whatever other excuse.

I just thought this would be nice - but there have been too many good points mentioned here that say otherwise!

I think what I really need to do is offer more than one payment plan - yearly/quarterly/etc. I know many of my parents would go for that and save me at least some time.

As a consumer, I like to pay in advance. It is less hassle to me to pay for each individual lesson and prefer to pay a month at a time. If you want people to pay quarterly or yearly, I would offer a discount. Say 5% for quarterly, and 10% for yearly. No refunds for missed lessons, but make up lessons would be allowed within reason. Or you can do a gift certificate. Sell x amount of lessons for a certain price and have a punch card system.

I agree that paying for individual lessons would suck. However, I don't like paying more than a month in advance and would _only_ pay for a longer period if there were a discount involved. Unlike our govt, I don't like giving 0 interest loans out. Oh and be sure it's quite clear what happens if either party needs to terminate lessons (how much, if any of the prepaid amount is refunded).

I'd really dislike being asked for a pile of post dated checks. The last thing a teacher would want it seems to me is to create an atmosphere of apparent distrust.

On the other hand, were I offered a reasonable discount, say 5 or 10 percent, to pay for several months up front, that would be appealing to me.

I charge by the semester, but I do allow monthly payments from families that ask (at a slight premium). One of the families gave me a stack of post dated checks. They didn't want any chance of being hit with the late fee.

They said that?

Yes. But they still wanted to pay by the month, since I teach 4 children in their family.

By charging an annual tuition, it gives parents the opportunity to pay it in full. I don't see why there should be a discount. They are not getting any less instruction. It is a convenience for them if they wish to pay up front.

The discount is because of the time value of money.

My time is worth the same this month as it is next month, or until I raise my rates.

I don't give a "discount" for those who pay for the semester all at once, but I charge *more* for those who pay monthly. Sending out monthly invoices takes a lot of my time and while most of my students do pay monthly, it is worth it to me if they can do the semester tuition to make that cost less.