Campus Collections Procedures
Background:
Most companies have a position called Accounts Receivable. The person with
this duty is responsible for collection of outstanding accounts owing to the
company.
Liaison College campuses should designate a person to be
responsible for collection of fees. The timely collection of outstanding fees owing
to the campus has a direct affect on cash flow. A consistent routine and
procedure is recommended.
Set Up:
You will require a filing system for follow up items (sometimes referred to as a
tickler system) and a file for post-dated payments and other payment notices. If
the same person at the campus is handling the finances and the follow up, then
the same file can be used for both. There are two types of suggested files: the
accordion file numbered 1 through 31 or a recipe-style box with index cards
numbered 1 through 31. The numbers represent each day of the month and your
payments and notices are filed accordingly. Your routine should include a daily
check into the file for both payments on hand for the day and for future
projections.
Procedure:
Upon Enrollment
Ensure that the student enrollment contract and other enrollment documents are
complete and accurate. The more information you can obtain from the student
when he is there in person will assist you when trying to locate a delinquent who
is missing in action. You should always get extra contact numbers “in case of
emergency”. Following are the types of student financing:
1)
For students who are being funded, all required documentation showing
proof of funding should be included in the enrollment package (i.e. EI
approval documentation showing tuition fees being paid, etc.)
2)
For students who are paying monthly, all required post-dated
cheques/credit card imprints, pre-authorized payment forms etc. should be
included in the enrollment package. The payments should correspond
with the payment plan form. It is imperative to record the student number
on every document and cheque.
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3)
For students who are using EFS, the completed application forms should
be included in the enrollment package.
First Day of Class
The first day of class is the day to follow up on the enrollment. When the student
has arrived for classes, prior to giving any materials and books, the file should be
on hand to follow up on any missing information. It is the campus discretion
whether the student should be permitted to continue to class in the event there
are discrepancies. In any event, the student should have clear directives of any
requirements and deadlines. This information should be diarized and followed
up. Your actions at this stage will set the tone for future transactions as it is likely
that students who provide a “story” at the beginning of their studies will be
collection problems throughout.
Weekly
The Accounts Receivable should prepare the weekly “cash flow report” that
would assist in Campus Management. The report shows projected cash receipts
for the next period.
Weekly follow up on any delinquent accounts (see “Monthly”).
Monthly
Campus Accounts Receivable reports is printed for Month End. The reports
should be reviewed and corrected to reflect accurate campus activity. The
reports show delinquent payers (last payment made date) and that should be the
basis for follow up. Highlight the accounts that require attention and print the
Student Account Activity Summary. A hand-written note on the account can
suffice, as an initial notice to students, who need a gentle reminder, for example,
“Here’s your account information. Please come and see me. Thanks.” Keep
copies of each account summary and your notes for follow up. For campuses
with a full time receptionist, a list of students should be provided for extra
reminders such as “I see that the Director wanted to see you; have you done so
yet?” And copy to the instructors also. This makes the student aware that the
entire staff is on side.
Two Weeks Before Graduation
In this case graduation refers to a student’s end date as opposed to the actual
graduation event date. Prior to a student completing his program, the following
will take place:
1)
Extract student file
2)
Prepare graduation checklist
3)
Advise students who have not met financial obligations (prefer a personal
meeting with a written follow up)
Drop Out, Disenroll, No Show
For students who discontinue their studies, a “Termination Order” must be
completed. The end result of the Termination Order shows calculations reflecting
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either a balance owing to the school or the student. If the school owes a refund,
then a refund cheque is prepared and mailed within 30 days (per the Private
Career College Act) and the refund recorded on the student account record. If
the student owes the school, then written notice, including the Termination Order,
is required.
Collections:
Most businesses make use of monthly statements to remind their customers
about overdue accounts and balances. Liaison College can employ this measure
also. Upon review of the Campus A/R by payment status on a regular basis
(monthly or as needed), there are choices of letters or reminder notices that can
be sent. Your best chance at any collection is while the student is still in school,
and nothing has the same effect as a personal meeting. The letters can be used
as a tool on their own or as a follow up to a personal meeting. The key is
keeping in contact with the student and maintaining a dialogue. Some campuses
use accounting software for their business records. The software will produce
statements for students.
Despite your best efforts, some accounts will remain unpaid and owing. In these
cases you may choose to use the services of a collections agency. Agencies will
charge a fee of 25% - 30% for each payment made on account. For example, if
your agency collects a $1,000.00 debt on your behalf, then they will retain
$250.00 (25%) as a commission for their service and remit $750.00 to you. The
student, however, is credited for the full payment, in this example, $1,000.00. If
you are sending a file to collections, the agency % will be shown on LDP as a
“discount” with the comment section notes complete. You will need the following
information for your agency:
1)
Copy of enrollment contract
2)
Copy of any student ID
3)
Copy of termination order and notice showing fees owing
4)
Copy of account summary
5)
Any additional contact numbers, addresses, next of kin information etc.
Record Keeping:
The importance of precise record keeping cannot be stressed enough. Students
who owe the school money are not likely to pursue payment arrangements; this
is a function of the school. Liaison College has a computerized record keeping
system and a manual system in place. Computerized records are used of ease
of compilation of reports and stats, however not all staff have access to these
records. The student file is the other source of financial information. The file
should be kept up to date in addition to computer input.
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Receipts
Any payment by a student requires a receipt. The payment is posted to the
computer system and a hard copy of the receipt is filed in the student file. The
original receipt is given to the student. The payment should be marked off on the
Student Payment Plan form in the file. Any discrepancy between the payment
made and the agreement upon enrollment should be immediately followed up.
NSF Payments
From time to time a student may not have funds in his account to cover a
payment. In such cases, your bank will notify you that funds have not cleared.
Make sure to check the reason for non-clearance, as it may be that the bank has
made an error, the account has been closed or that there were non-sufficient
funds. In any event, the student must be notified immediately and replacement
payment sought. Liaison College has a $50.00 NSF policy; in addition to the
payment, the student will owe a $50.00 fee. Depending on the nature of the
matter, campus staff may choose to waive this fee. Make sure computer records
indicate the NSF transaction. A copy of the cancelled cheque should be kept in
the student file. If the student cannot make good on the payment within one
week of notice, you may want to review the entire financial arrangement.
Perhaps the payments are too onerous, or the student requires another financial
resource. Should payments not be made, the campus should consider cutting its
losses.
EI Payments
Payments approved by HRDC are payable to the client (student) as monies are
taxable.
Each student sponsored by HRDC will receive some form of
authorization or contract. The school requires a copy of this documentation.
Read this information carefully; as it will indicate how much funding the student
will receive from HRDC and how much the student is required to contribute. The
school is responsible to ensure that the student pays for tuition fees. As such, a
copy of the contract from HRDC or some other reminder should be filed in a cash
flow file for easy reference.
Post-dated Payments
Students who are making regular monthly payments (either by automatic
withdrawal or by cheque/credit card) should supply the campus with the
appropriate documentation at time of enrollment. The student file should indicate
that the documentation was received and a copy, if applicable, should be filed.
The actual cheque or credit card imprints should be filed in the appropriate day of
the month for ease of deposit. In the case of an automatic withdrawal, a copy of
the agreement should be filed in the appropriate day so that the banking
information can be verified readily.
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