Ask the Experts: Dealing with Overdue Payments
Q: How long do you allow debt to accumulate with a student? What’s your policy for dealing with that and getting parents to pay up?
A: Students with outstanding choreography, costume and competition fees or overdue tuition is a tough problem. Our policy is to charge a 10 percent fee on all accounts past-due over 30 days; if the account has not been cleared up within 60 days, the child may be removed from class. However, enforcing that policy has proved challenging.
Because we never want to see our students suffer, we as studio owners tend to make exceptions and do what we can to help families out. But this can send a conflicting message to parents who are chronically late with payments, avoid coming into the studio and don’t return calls. I’ve had parents who wait until the choreography has been completed and the costumes have been ordered to start falling behind in their payments, often accumulating thousands of dollars in debt to the studio. I have sent letters and e-mails, made phone calls and even had meetings with them to try to get them to make payments. It’s hard because I don’t want to hurt my dancers’ feelings by removing them from routines—which, in turn, would hurt the other dancers as well.
But the bottom line is that I cannot afford to carry these debts. On the advice of an attorney, our studio has begun requiring parents with end-of-year outstanding balances to sign a promissory note with a schedule of payments over three months if they want their children to participate in our recital and Nationals trip. The promissory note is necessary in case I need to take the case to small claims court. Most parents, when confronted with this option, choose to pay the remaining balance in cash, eliminating the need for the promissory note.
I love my students and hate to see finances cause tension or be the reason that they cannot continue to dance. But it is important that I maintain good business practices.
Joanne Chapman is the owner of the award-winning Joanne Chapman School of Dance in Brampton, Ontario.