If you run a private school or a daycare, you may be dealing with a significant volume of cheques. The reason for doing so is likely because, well, checks have been around forever, and because they seem like a ‘free’ way to get your tuition or daycare fees in. But is there anything like a free lunch? We review the 5 main drawbacks of accepting check payments for school & daycare administrators, owners, principals or even teachers.
1. Cheques are a HUGE time sink.
Getting paid with checks is just time consuming. Think about the time that you or your employees have to put in throughout the journey of a cheque from your parents hands to your bank account.
Collecting them, storing them, depositing them at the bank – all of those manual steps add up to hours of monthly work. Not to mention that certain parents seem to enjoy scribbling illegibly, resulting in the cheque being rejected.
What could you or your employees focus on if your funds arrived magically to your account without any manual involvement? From re-enrollment to parent engagement, the opportunities of redistributing these time savings to higher value tasks abound.
2. Checks present a real risk of fraud.
Ever felt uneasy having all these post-dated cheques sitting in the your office cabinet? There is some rationale for that.
The information at the bottom of a check (the digits representing the routing number, account number etc.) is everything needed to debit a bank account of ANY amount.
From there, it’s easy to imagine a number of ways things could go wrong: a break in, a rogue staff member, a check lost on the way to the bank…
Of course, in the event of fraud/unauthorized transactions, a bank can likely reverse a debit, but while your parents may get their money back, the damage to your organization’s reputation would be significant.
3. Checks bounce back.
Just when you thought you were done, it’s happened again. One or several of the cheques you have taken so much pain to deposit have bounced back. You now need to charge parents a NSF fee to cover the one charged to you by the bank, AND you need to ask the parents for a new cheque to recover your dues, hoping that this one doesn’t subsequently bounce back.
4. Parents generally dislike cheques.
If parents don’t corner you every day to tell you that they’re fed up with cheques, then they must not mind them, right?
Or so you may be secretly hoping.
While not everyone is alike, most families dislike having to write checks, which is especially true of millennial parents, who have grown up in the era of online banking and digital payments.
And do not underestimate the time that parents also invest paying you by check: writing them, re-ordering them, dropping them off, also adds up. The last thing busy households with two working parents want is investing time in using antiquated payment methods such as checks.
5. Checks are on the way out.
It’s pretty common for many people to not even own a checkbook. And who can blame them? Usage of cheques is in free fall and at this point, it’s not a question of if but when checks will disappear entirely, as can be seen on the chart below from Bloomberg.
Checks – How to break free?
After taking into account all these inconveniences and inefficiencies, are cheques really free? The Association for Finance Professionals, for one, estimates the median real cost of accepting a cheque payment to be $3, once all indirect costs have been taken into account.
But here is thing: if checks are costing you $3 a pop anyways, you might as well consider investing in the technology and processes that can save you time and make a positive impact across your organization.
Many schools and daycares feel married to postdated cheques because they provide the sense of safety that payments will be honored. However, the same outcome can be achieved by collecting electronic pre-authorizations from parents’ bank accounts, and even a cheque can be cancelled prior to being deposited.
So, if you still rely heavily on cheques to collect your fees, consider adopting a digital alternative in order to modernize your organization’s processes.
TUIO is the #1 billing & payments platform in the educational space. Principals, owners, administrators and daycare supervisors save hundreds of hours each year automating their administrative billing tasks on TUIO and providing families with a secured TUIO account where they can seamlessly provide pre-authorizations for payment of their upcoming school or daycare invoices. If you would like to see for yourself what TUIO can do for your organization, schedule a demo and/or read some of our customer testimonials.