The best way to avoid debts is to try and prevent them from happening. This can be done by using some simple but effective guidelines.
- Make enquiries of the parents as to contact details, home addresses, work addresses. If parents are separated, then get individual addresses and contact details including email and employment details should be obtained. Check whether the parents own their own homes. Also, if parents are self-employed make separate enquiries regarding earnings expectations and actual earnings for the last year or two. Arming yourself with this information will make it easier and more effective to take any necessary enforcement steps when things go wrong.
- For new pupils, request half term fees upon the parents' acceptance of the schools offer of a place - this should be non-refundable unless the school can fill the place. Therefore in the event that the parent has second thoughts after acceptance and withdraws the child prior to the start of term, the school will be covered for their loss. In the event that the school manages to fill that place at short notice and there is no loss to the school then the school can refund the parents deposit at their discretion.
- Ensure there is joint and several liability of parents/guardians signing up to the parent contract. This can only be done by ensuring that the terms and conditions specify there is joint and several liability and this is supported by the contract to which the parents sign up on acceptance of a place. This means that either parent can be pursued for the full amount of the outstanding school fees.
- Insist on direct debit for payment of fees and do regular checks to ensure all parents have paid on the due date. This cuts down on administration time and will ring alarm bells if payment is not received on the due date. It is much harder to monitor cheque payments because such an arrangement is less reliable and less regular. It is also prone to excuses such as 'cheque in the post' or there have been postal delays!
- Do not let outstanding fees build up. If there is default on one terms fees, ask the parents why and check if there is an underlying reason which may cause further problems. The usual cause of this is that the main salary earner has lost his job and is in the process of finding another. Make enquiries to the parents as to when the income stream will resume and whether that expectation is realistic. In the event of the parents' being in default of more than one terms fees then it might be worth liaising with the headmaster and to consider more punitive steps such as interest for late payment, guarantees from parents or grandparents, realistic monthly instalments which pay both arrears and current dues. In extreme cases consideration should be given to excluding children. The key here is to keep the debt situation under review.
- What about siblings? If punitive steps are necessary as indicated above, then those punitive steps should be applied consistently.
- A credit control system should be put in place to deal with bad payers and/or debt situations. There should be no more than two letters pursuing payment before a view is taken as to how the matter will be pursued and if in doubt, the bursar/assistant bursar should take legal advice.