Stop Chasing Payments: My Monthly Billing System

If you've ever reached July wondering how you're going to get through the summer before the next term's invoices come in, this episode is for you.

I'm walking you through how monthly billing actually works, why I made the switch, and what life looks like on the other side: income on the first of every month, no chasing, and about an hour of admin per month instead of calculating bespoke invoices every term.

I cover how to work out your monthly fee, how to introduce the change to families without it feeling awkward, and a Q&A answering real questions from teachers, including the one that comes up almost every time about paying during the summer holidays. I also share the tools I use to keep the whole system running almost on its own.

In this episode:

• Why termly billing creates a summer income gap, and why that's not inevitable
• The simple calculation that turns any lesson rate into a fair monthly figure
• How to introduce monthly billing to families, including what to say and what to expect
• Nine practical questions teachers have about the system, with honest, specific answers
• What life actually looks like once the system is running: income on the first of the month, no chasing, no end-of-term recalculations

Resources mentioned:

• Monthly Billing Transition Toolkit (£12)
• Free Studio Policy Template
• Focus Sessions (£67)
• Piano Teacher Blog

Access the show notes here: Episode 6 Show Notes

Transcript

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It's the last week of August. You've had the whole summer holiday, and it's been a bit tight because the last time you were paid was in April, but you've reached the last week of August, and you really just want to be looking forward to welcoming your students back into your studio. However, you find yourself sat at your computer with loads of different term invoices open, one bespoke invoice per student, and you're trying to work out how much to charge because this term has 14 weeks and the last one had 12 weeks, but also you need to check back through your notes to see how many lessons you're carrying forward into the new term and for which students you kind of also need to catch up with which students are taking holiday during term time because you promised to not charge them for those lessons, too. The problem is you haven't heard back from everybody, so you can't get this thing done, and you need to have all of these invoices sent by the end of the day. This is termally billing, and you don't have to keep doing it like this. This episode is all about monthly billing, a system that changes everything. I have gone through the transition from terminally billing to monthly billing, and I'm really excited to tell you about this process because my life is so much simpler now I'm on this side of it, and I want you to know how much time you can save and how feasible this switch really is. I'm Victoria. I started teaching piano part-time 18 years ago alongside a career in pharmaceutical market research, and I made pretty much every mistake you can make when it comes to running a teaching business. But today I run a thriving studio from my home on the south coast of England with students I love and a waiting list I'm proud of. I started this podcast because I want that for you too. If you've ever said yes to a reschedule you really didn't want to do, felt your heart sink when your phone buzzed with another last minute cancellation, or found yourself putting off increasing your fees for another year because the timing never feels quite right, this is the podcast for you. I've been there and come out the other side with a teaching business that lights me up every single day, and I'm here to help you do the same. So when we get to the last lesson of the summer term, we all breathe a big sigh of relief because you know things get more and more difficult as you get towards the end of the summer term, kids are tired, we're tired, and we're all in need, in very much in need of the long summer break. The only thing is, when you build termly, you have this massive summer income gap. So the last Terminally invoice was paid in April. That was for the summer term, and nothing is coming in until September. Now, I don't know about you, but going for four months without any income is really difficult, even for the most organised people. It's like you're between jobs and you have to make that money stretch all the way. Four months, I mean it's a third of a year. And this model can actually cause a lot of stress, a lot of unnecessary stress in the household, especially if you're the main earner. Or which is more likely that you get unexpected costs come up over the summer. If you have children, they're not happy to sit at home for six weeks doing free activities. I'm not saying you're obliged to go out and spend loads of money on your kids at summer during the summer holidays, but it does make it a lot easier if you have the wiggle room to be able to spend a little bit of money and not be worried that you're continually diminishing this pot of income that isn't going to be replenished until September. There's also quite a big admin burden with terminally billing because in the UK we have three terms, but they don't have the same number of weeks per term. I think it autumn term is the longest term of 14 weeks, and then we have something that varies year on year between 12 and 13 weeks for the other terms. So it means every single term you have to change the amount you're going to invoice every single time. There's no consistency, there's no automation possible, and every calculation has to be redone from scratch. Something that adds to that burden, of course, is if you refund lessons or carry them over to the next term, which is something that I used to do. And it means you have to keep a really good record of exactly which students and how many lessons you are agreeing to carry over for whatever reasons. I mean, I've talked about this in my other episodes, and I know I'm not alone, that uh for the first many years of my part-time teaching, I refunded every lesson that was missed, whether it was through my cancellation or theirs. And either I refunded it or I carried it over to the next term, which just meant cutting down my income for the next term by quite a lot. So when you have this kind of system where you're carrying lessons over to the next term, you not only have to be a good record keeper, you also have to then make a bespoke invoice per term per student. And it's a lot of extra stress and it's a big admin burden. And you're doing this three times a year. You might think, well, it's only three times a year, but it adds up because no one wants to make a mistake, you don't want to accidentally overcharge your student, and with this kind of system, there is always the risk of getting it wrong because you're having to rely on your own notes, and you know, we we're human, we all forget things, we all miss things every so often, and it just adds a level of uncertainty that is unnecessary to be honest, especially when you have something like a monthly billing system available to you, and it is absolutely available to every music teacher who teaches privately, and you'll find out why in the rest of this episode. Another problem with termly billing is having to chase for late payments, because when you only invoice once per term, that's a pretty large sum per person per invoice, and it's irregular intervals that don't really line up with any other regular payment system that we all have. I can't think of any other circumstances except for to do with schools, if you go to a fee-paying school or if you pay for lessons through a school that you need to pay three times a year. It's a bit of a unique system. So the irregular timing makes it much more likely that parents are going to forget. And having that bigger amount to pay each time, again, unless they're really organised or have a very comfortable overflow of cash, paying these Tamly fees is quite a big chunk. So I found I was chasing for late payments more often, far more often than I do now. I hardly chase at all, and you'll see why. But it became this really uncomfortable situation because none of us want to chase for payments. We want to send out the invoice, we want parents and students to see it, pay it, and and be done with it. We don't like talking about money that we charge for the lessons we give. We carry a lot of guilt anyway for charging for what we do because we love this this occupation so much. So the less we can talk about money, the better, right? So when you have to keep chasing parents and students to pay the invoices, knowing that it's a hefty chunk of money, it's just uncomfortable and it puts you in certainly if if you're anything like me feeling uncomfortable with no, it's not confrontation, but it's asking for money when they've received an invoice and have forgotten it's it it's not a nice situation to be in. And extrapolating from that, when you send an invoice out and you aren't paid, and there's silence, it can do some funny things in your head because you don't know why they haven't paid it. And for a lot of the time, you can assume that oh, they've seen it and they haven't paid it because it's not a priority in their mind, and that can kind of feel a bit painful in the sense that you know we're providing these music lessons for their child, for example, and it feels like you're valued a little bit less. Now, I'm saying these are just the thoughts that can go around your head, this is not exactly what's going on. It's more often than not that it's parents are so busy. I am a parent, I am very busy, I haven't met a parent that is not busy, and so these sorts of things get forgotten, particularly with the irregular schedule of them. But the point I want to make is that a system where it leaves open the very real possibility that late payments will happen, it damages the relationship between teachers and our students because you don't know what they're thinking, and for a lot of us, we think the worst uh think that you know they haven't paid yet because our rates are too high, or they haven't paid yet because they don't value the lessons, or they haven't paid yet because they're not planning on coming back. You know, you don't need all of that stress, all of those worries, and all of those thoughts racing around your mind. Wouldn't it be lovely if you could have a situation where you don't ever need to feel that kind of self-doubt? It can just float away. We have this solution, but terminally billing does not help. There's also another side of it. So the psychological weight of feeling that your income is unpredictable and you are at the mercy of other people paying on time, which can get really stressful and exhausting when you have your own bills to pay, when you need a certain amount of money to come in at a certain point so that you can pay your mortgage, so that you can pay for your car payments, for your furniture payments, whatever. Really important bills that need to be paid, and you don't want to be stressing out that you're unable to pay it because you have no overflow, and three parents have forgotten to pay you on time. It's a stressful situation to be in, and there is a a way out of it. So you will have heard me talk about my beginnings as a piano teacher, as a part-time piano teacher when I was 22, and I used to accept cash on the day lesson by lesson, and if people didn't turn up, nothing happened. And I used to have this little receipt book which I would write in, you know, one lesson at £10 and sign it, and that was it. That was my that was my invoicing system. Uh, and it worked for a while, and you know, I only had five students at the time, and I didn't think that terminally billing was relevant to me, so I I didn't approach it. Then as I got more established, and certainly once children came into the picture, my own children that is, teaching in a termly fashion became essential because then my kids were in school, and when they were not in school, I needed to be available uh to look after them. So the termly billing was just my own understanding from my childhood piano teacher for how things were done. That's all I'd ever heard of was that music teachers bill once per term, three times per year, and that's that. I didn't think to question it because that's all I'd ever known. And as is the way, you don't discover new things until you engage with other music teachers around the world. And so when I started doing that, I came across uh it was mainly American teachers talking about having a monthly billing system, and in my mind I was like, What? How does that work? That's definitely not going to apply to me because I teach termally, so there's no way I could bill monthly and teach termally, and there's no way I can teach during the school holidays because I need to be available for my kids. So I just figured it's not right for me, and I kind of dismissed it. I didn't even consider, you know, what would parents think of of the system if I started billing monthly. It didn't, it didn't really enter my mind. So the turning point was reading more and more about these teachers who were billing monthly and understanding how they were doing it, how they structured things, why they were doing it. And then when I realized you can bill monthly even if you teach in a terminally fashion, my eyes were opened to this new possibility. And it just required a little bit of simple maths to make it work out, and some straightforward policies around the billing system. So after experiencing all these long summer holidays with no income, I was then existing in the Easter holiday, which of course is the break between spring term and summer term, and that's not as long as summer holiday, but it's longer than Christmas, it's normally about three weeks. And that's long enough for that pinch to be felt again, especially when you've come past you've come out of Christmas, the other side, you get paid for the spring term, and that kind of pays for all the overspending you did at Christmas time, so it can feel really tight. And something in my brain went, I could do this, I could change to monthly billing, these other teachers do it, I understand enough about it, I'm gonna make the change from September. So that was in in about April, it would have been May. Yes, May is when I when I sent the first first contact about it. That is when I first communicated to my students and families that I would be switching to monthly billing the following term, so the start of the autumn term that year. Now, up until that point, I had operated a studio policy agreement that new students would sign when they would start lessons with me, but there would be no annual review or they there would be no change, it would be that agreement would stand from whenever they signed it, however many years ago. So I decided to take the opportunity while I was switching from terminally to monthly bidding to make this an annual re-signing up for lessons with me. And this was a really important change to go along with it because it introduced the opportunity for a clean break. So this actually made it easier psychologically, it made it easier for me to put in place this new change so that if parents or students weren't on board with a monthly billing system, that was their guilt-free opportunity to not actively sign up for lessons again. And that made me feel better because obviously they'd been with me for so long and we'd always done a terminally billing system, and nobody likes change, do they? Very few people like change, and so it made me feel a bit better saying, you know, if this is a change that's happening, if you would like to keep your slot, that's how I worded it, if you'd like to keep your slot, you'll need to sign this new agreement by this date in you know, in time for starting in September. So this clean break also enabled me to be even clearer on my policies and much easier to stand up for my policies, which until this point I had been very lax about. I had had the no reschedules and no refunds clause in my policy for a good couple of years by that point, but I never reinforced it. And whenever any anybody said, Oh, I'm gonna be on holiday, I'd say, Yep, okay, I'll take that off the next terms invoice, or if they couldn't make it because they were a little bit unwell, or they had a school play or whatever, a residential, I'd say, nope, that's no problem, I'll just I'll recalculate the next invoice and blah blah blah, you know. And that had already started to wear me down a bit each time I did a new set of terminally invoices, seeing how much I was having to knock off of each one. And that really adds up when you add up how many refunds effectively I was giving by carrying the lesson over, it makes it sound nicer, but it's actually just refunding. It was horrible. I was missing out on so much income through no actions of my own, but just agreeing to give away lessons. So this was a really great opportunity to put that boundary back in place and really stand up for it this time, secure in the knowledge that I have given everyone a clear opportunity to decide nope, those policies aren't for us. We'll go find a new teacher. And I'm happy to tell you no one did say that. So the very first month when this monthly billing came into effect, the first monthly payment, which was due on the 1st of September, it was so great to get to the 1st of September and open my bank account and just see a whole bunch of monthly fees sent over by standing order from each student. So that it could run on an automated basis and they wouldn't have to remember every single month. But just opening my bank account knowing that all the income the vast majority of students and parents had paid on time was such a relief. Suddenly it was like, yes, this is gonna work, and it felt it felt like a big, a big weight off my shoulders. And in fact, more people paid on time, even in that first month, than had paid on time for the termly invoices in all those previous terms. Some of the things that really worried me about switching to monthly billing, beyond just making a change to my system that you know parents might not agree with or understand or like, was that I would get complaints. That was my my first thought, you know, why are you changing things? We know how this works. Why change something that isn't broken? Well, the fact is I think you can understand that, at least from my perspective, that system is a little bit broken when you need irregular income and that's what you rely on for your family's security. I did worry that some of my students would leave, but I made peace with that because this is a change that I made with intention to improve the running of my studio, to to reduce all those horrible things about terminally billing, the peaks and troughs of income, the unwelcome worries and fears concocted by my brain when payments were late, thinking it was a reflection on me and you know disapproval of my teaching or something like that. All of that junk is gone. So I knew it was the right decision for me, and that's what bolstered me all the way through, despite some fears about students leaving or parents asking questions about the calculations that I didn't want to get wrong, you know, all of those sorts of things. But as it turned out, once you have it straight in your head and you understand how the process works, creating a way to communicate this to parents in simple terms is the solution. And knowing the kinds of questions that they would ask and being ready with a response that didn't apologize for this change and didn't over-explain, but kept it straightforward, unemotional, and business-like, I suppose, for lack of a better word, it made it more professional. Okay, so monthly billing, how does it actually work? Its core principle is that you calculate the total annual lesson fee. So you decide how many lessons you're going to teach in an entire year, and I run my year in the academic sense that my year starts on the 1st of September and ends on the 31st of August. So you take the number of lessons you're going to teach per year and you multiply it by your lesson rate. Then you divide that number by 12, which divides it across the 12 equal monthly payments, and families pay the same amount every Single month, regardless of term length, regardless of school holidays, regardless of how many weeks or in a month, and that's it. So families know exactly what they're paying every single month. There's no surprises, there's no, oh, this is longer term, so this is a bigger, bigger bill. It's just the same amount every single month, and it actually gets taken in as a regular household bill. So it aligns with things like energy bills, gas electricity, phone bills, broadband bills, all of those are generally done monthly. So it becomes incorporated as part of the monthly bills that go out of the account, and therefore it's much easier for families to budget because everything runs on a monthly cycle. Well, almost everything runs on a monthly cycle. And a monthly payment of £70 odd pounds is so much easier to absorb than £284 at the start of a term. It's much more manageable. Now you might already be going, Yeah, but I'm gonna be not teaching at all in August, and I'm still gonna be charging in August, and you're not charging for holidays. You're just calculating the total that they pay across the year and spreading it evenly across 12 months. So you aren't charging for lessons that don't happen, you're just smoothing everything out across the year. Now there is a monthly billing transition toolkit that I created to do exactly what it says, help you transition to monthly billing, and there is an FAQ responses section included in that, which is really the main questions, the frequently asked questions from parents and adult students about monthly billing and model answers that you can give. Model answers that don't over-explain or apologize, but keep it nice and straightforward and clear, and address lots of the worries that that people might have. And we're going to go into that in more detail later in this episode. My favourite part of the monthly billing transition toolkit is the calculator tool that I've got in there, and I use it every year at this time to help me work out my new rates. We won't be talking about raising rates in this episode. If you would like to learn more about how to raise your rates ready for September, please check out episode 5 where I go into more detail about that. But in terms of calculating your monthly fee, I'm quite proud of this little tool because it's so easy to use. You just pop in your number of lessons that you teach in a year, you can decide how many lessons you're going to teach, and your per lesson rate. For example, if it's a 30-minute lesson and how much you charge for the 30-minute lesson, and it does all the calculations for you. It rounds off the monthly figure and then it back calculates a per lesson fee so that you're not charging some weird amount like £67. It's much easier to keep in mind if you have a whole number for your monthly fee. But the calculator tool does all that for you. It also handles the situations when you have a student join mid-year or leave mid-year because, of course, we then need to calculate how many lessons they have available to them during that year and average it across the remaining number of months. So there's a separate section for each of those circumstances on there, and it saves you a lot of time and effort and a potential headache when uh communicating those figures to parents. There is a section with email templates as well so that you can update the information and let your families know exactly what's changing and how. So it's a great little toolkit, it's only £12. I will link it in the show notes so that you can go and have a look. As I mentioned earlier, the most efficient way of getting these payments through is encouraging students and families to set up a standing order from their bank account. Some of them might not have heard of it before, most people will have because of needing to set up a regular payment for something else. It's different from a direct debit, which generally you need to go through a company and pay a fee for. So it's the most money-efficient way of getting regular payments done, but it does rely on the parents or adult students setting up the standing order from their side. But for the most part, I haven't experienced much trouble. And if students don't want to set up a standing order, that's absolutely fine. They can do a manual payment, they just have to remember to do it at the right time every month. So I have a handful of students who still pay me manually, but they're pretty good at remembering, and also some of them just pay before the due date, which is also very helpful. So with the standing order, you obviously can pick the date. So you just recommend they put the date as the first. That's the route I've gone, so that all the money comes in on the first. You can do it before the end of the month if that's what you prefer, if that's what lines up for you better. I just pick the first because it works for me and it's easy to remember. And once they've set it up, they don't have to worry about payments anymore. They'll know that will go automatically. The invoices are sent in a recurring automatic way as well, which saves you a whole bunch of time. So your income is generated, and no one has to have a weird conversation about late payments or how much is it going to be this term. So I use Zoho books for my invoicing. I just use the free version, and you can set up recurring invoices on the free version so that they are sent out on a specific day every month, and once you've set it up, that's it. It's super duper easy. So I get my recurring invoices to be sent out on the 24th of every month so that there is approximately a week before the payment is due. It just gives a heads up that the payment is due within a week if they are going to pay manually. Most of them who are paying manually will then pay it as soon as they see the invoice. Then I allocate one hour each month to log all the payments on my spreadsheet and against the invoices in Zoho. I usually do this around the second or the third of the month, after which all of the payments should have come in, and that way it highlights anyone who is late, and then I can just I click a button inside Zoho and it sends a reminder email and that tidies up the rest of them. Now you might think, okay, you're doing that every single month, logging invoice payments, but honestly, it gets so quick because you have everybody on the same amount, so you're just checking in your bank account, you can scroll down and see all the same amount coming through, and you just log it against the student or family member, and it's all done. And it's it's really, really quick because you know exactly what to expect. You're not not having to go and find the original invoice and match it up against your records and check that they've paid the exact right amount. It really reduces the thinking burden when it comes to this part of admin. Now, when it comes to late payments, I only in the last couple of years introduced a late payment fee clause to my studio policy agreement. And happily I've never had to enforce it, but just the act of putting that in my studio policy actually tidied up the remaining couple of people who would always pay after the first, who would pay late or would always need a second reminder, which is actually really useful, and it's I know it's kind of under the threat of getting a late payment fee, but the effect has been very helpful, and it it is completely optional, you don't have to put it in there, but it does make the invoice payment a bit more prominent in people's minds when they know there is the potential to receive a late payment fee. So for mine, because I get everyone to pay on the first, I say if it's not been paid by the fourth day of the month, a late payment fee will be applied, and it's just five pounds applied to the invoice. But like I said, I've never had to enforce it and I feel fine about that. Of course, there's the odd situation here or there where families might have had something go wrong or a payment just was cancelled or went wrong, and you know you can follow up with them. But on the whole, this system runs so smoothly. Alright, so when it comes to introducing this monthly billing system to your families, in terms of timing, the cleanest transition, in my opinion, is at the start of a new academic year. If you work on an academic year timetable, that's the most obvious clear time to do it. The start of the autumn term, so the first of September, when everything is new and fresh for families anyway. There'll be new clubs at school that their kids have joined, or they might have taken up other lessons or things. And so an update to policies and all the rest of it is kind of more expected. You can make this switch mid-year if you wish, but it does stick out a little bit out of the norm and might raise more questions. So I go into much more detail than this in episode 5 about raising your rates in terms of how to communicate with families, but just as a summary, I always send the email first with a clear explanation of the change that is going to happen that will be effective from September, and then I provide students and parents with a physical copy of the new agreement at the next lesson, and then mention it verbally also if the parents are present in the lesson or at the door when they come to pick up. So you get this three-pronged approach for communicating this change rather than just relying on everyone, first of all, opening and reading their emails and also remembering it. I would recommend aiming for about a two-month transition period, so two months notice before the switch to monthly billing is actually going to take place. It gives everyone time to process the fact that it's changing, to sort out standing orders, to look at their finances, the ins and outs, and kind of come round to the idea. You don't want to announce it on a Friday and say it's going to come into effect from the very next week. That's not enough time for people to get on board with it and for all the admin to be sorted out from both sides. So generally, what I would recommend for making this kind of switch is obviously communicating the new monthly amount, maybe some guidance on how to set up a standing order if they've never done that before, being very clear about what the payment deadline will be, and also the deadline for returning the signed agreement. So keep the communication in the email short and to the point. There are email templates, as I mentioned, in the monthly billing transition toolkit ready to personalise and send in this way. When I sent my email, this very first email to my students, I put important in capital letters in the subject line. So that it was immediately obvious that this is an email that is important, but also what is changing and when it's happening. And the first sentence was totally clear from September in brackets start of autumn term 2022. My fee structure for piano lessons is changing from terminally billing to monthly billing. Making it as an assertive statement that this is what's happening. Definitely don't go into it saying, I've really thought long and hard about this, I know that change is not what people like, I don't want to disrupt anything, but I've decided blah blah blah. It's just loads of fluff words that aren't going to help you get across the information, and that's what this email is about. It's about communicating the information, not softening the blow in inverted commas, if you feel like it would be a negative thing, because to be honest, it's not. We could go into more detail in a minute. But being direct and comfortable and assertive with this change that you're making to your studio is really important because the way you come across when you talk about this is going to affect the way parents take the news. If you come out with some apologies, they're going to take it in a different way than if you were assertive and confident with it. There will be more than likely more questions and doubts because you're doubting yourself when you are apologizing for making a change like this. So it makes a big impact on how well received this new information is. So in that email, I also include mentioning that by signing the new contract, you're going to secure your existing lesson slot for the new academic year, and a small note actually that new contracts will be issued in this way on an annual basis. So it's starting the tradition, I suppose, it's starting the system off with the expectation that this isn't just another one-off. This is we're switching to monthly billing, and there's going to be an annual re-signing of the agreement to hold your slot every single year. Nice and straightforward and clear. So when I sent out this studio-wide email back in May of 2022, I did not have any pushback. None of my students left. There were a couple of questions, which is totally normal and to be expected, but because I had thought through the things that were likely to be brought up, I was completely comfortable responding to those questions, whether it was face-to-face or by email. Of course, I was working out some things as I went. I wasn't the fountain of knowledge that I feel like I am now when it comes to monthly billing. But that's how it goes. You adapt. I mean, it's not dissimilar to the skill that we all have that we employ in every single music lesson we teach, which is responding in the moment to the student in front of you. So if someone has a question about this system and you understand what you're doing, you can just explain it to them in simple terms. Knowing that nothing is hidden, you're not trying to pull the wool over their eyes, over your your family, student family's eyes. It's just switching to a system that is better for you and to be honest, better for them. So now I figured it would be a useful time to go through some of the questions that certainly came up for me and questions that I have received from other teachers since talking about this monthly billing system. So the first one is what happens if you need to cancel the lesson as the teacher? And the approach I use because more often than not, if I'm going to cancel it's because of a migraine, which is not great. But in order to leave the recurring invoices alone, leave the standing orders alone, I will just refund that student's lesson directly. So I ask for their bank details and I'll just transfer the exact per lesson amount for the one lesson that I cancelled for each of those students that day, because normally the migraine knocks me out for the rest of the day. If your students are not comfortable sharing their bank details with you, which is perfectly fine. If they have PayPal, you can do it that way. When some students asked me to just take it off the next bill, that's when I have to push back and say, Well, it we're running a recurring monthly billing system so that you don't have to go back and change your standing order twice, which would be once for the next month, and once to change it back to the regular amount, and so that I don't need to waste time doing new invoices. We can just work it like this, and I will refund you the money directly. You can keep a record on accounts for lessons that are refunded to a specific student and deduct those from music books and sheet music that you might buy for the student that you would then bill for them. But I don't I tend to avoid this so it doesn't get complicated. I would much rather refund the money on the day if I can bear to look at a computer screen or the next day, or certainly within that week if I've been really unwell. I would much prefer and do prefer to refund the money directly that way it's all taken care of, and I don't have to remember to input that into the system against certain accounts. So I still log it in my invoicing system. I create a credit note within Zoho Books and then refund that directly. But I can go into more detail on that maybe with a Zoho Books tutorial for anyone who might be interested. But yes, that's what I would recommend so that your income, so that your bank balance really reflects what money is yours rather than having lots of IOUs that build up. I don't I don't feel like that's a very good uh system. Certainly not for for someone like me who wants to have everything sorted out and not have to remember things at a later point. So, what about rescheduling lessons? If you are a teacher who reschedules lessons, no judgment, but you obviously know how I feel about rescheduling lessons. If you want to keep rescheduling lessons with a monthly billing system, it has no impact, it's fine. You don't have to change any payments, they don't have to, you don't have to change any invoices, you are just rescheduling a lesson for free, effectively. Uh, but the monthly fee stays the same either way. And just a note about rescheduling: if you are new to this podcast and new to my my approaches to this element of lessons, is that you held that lesson slot for the student so it was paid for. So when you choose to reschedule the lesson, you are effectively giving away that time for free. But I go into more detail on that in other episodes. If that's something you're working through, you can check out episode one, which is about the cancellation policies, and episode three, which is about refunding lessons. In summary, rescheduling lessons does not affect the monthly billing, it doesn't affect the invoice, it's whether you offer it as a policy decision. Now, if you teach in a school, this is something that I have never done. I've never taught in a school, I've only ever taught privately. So, in order for this monthly billing system to work, you would need to be in a school where you invoice parents directly rather than going through the school. If you invoice the school itself, you'd need to agree to 12 monthly invoices with your own terms and conditions, and it's a different arrangement. But as I said, I don't have any personal experience with that. So I would encourage you to explore it with the school or schools that you teach in if that's something that you'd like to go ahead with. It's not that it's not possible, it's just that it might not fit with the way they do their invoicing. But really, the direct to parent model is where monthly billing really works well. Okay, what about adults who take holidays during term time? Now, I mentioned this earlier in the context of termly billing and the way I would roll over lessons that had been missed due to holidays taken by adults during term time. I have a very clear position about this now. I do not recommend reducing your fees for adults who take holidays in term time, just because that slot that they have is protected for them every single week. And because they go on holiday during term time doesn't mean you shouldn't still be paid because you're unable to use that time for another student for the odd week or two weeks here or there where they've gone on holiday during your teaching time. So the lesson not happening is their choice, but it's not a change in your availability. However, because I know not everybody operates in the same way, if you do offer this to your adult students that they can take holidays during term time or during your teaching weeks and you won't charge them for those lessons, you can still run a monthly billing system. You just have to make sure that you allow adults to book a set number of lessons per year rather than having a fixed weekly slot. So you agree the total number of lessons at the start of the year and then you calculate the annual fee from that and divide by 12. It will just mean that the monthly fee for those adult students will be less than the monthly fee for students who are attending every single lesson that you're offering in the year. If these adult students then want additional lessons beyond what was agreed, so if they want extra lessons during the summer, Holiday, for example, you can invoice separately at the adjusted per lesson rate that the calculation tool will give you, and that can all be sorted out separately. And it's not a big load of extra admin, it's just a last addition before the end of the school year. There is one scenario where having a reduced annual total can be practical, and that is with shift workers. Now it's it requires some stars to align, so you would need to coordinate two adults on the same slot who each attend fortnightly, for example, in alternating weeks. That could work if the scheduling aligns, but it's I've never seen it happen, which is why I don't take on people who need a once-a-fortnight lesson. So for the vast majority of adult students, it is a blanket approach. Same monthly fee, same expectations as everybody else, and it is the cleaner and more sustainable option. It also doesn't open the door to the concept of refunding lessons that are missed because of something like a holiday. When you keep your policies strict and consistent, it doesn't invite that, oh well, you know, because it was a pre-booked holiday, I was allowed to not pay for that. So what about this one? What about this one? And then it kind of opens the door to all these extra conversations that you don't really want to have. You don't want to be wasting your brain power and anxiety, dare I say it, on having those conversations. None of us like talking about the money side of running a teaching business, and the less we can say about it, the better, which is what this fabulous monthly billing system provides. It provides a stable, secure system that runs in the background that you set up once, and then you can you can concentrate on being a music teacher, you can concentrate on delivering fantastic music lessons to your students without worrying about the have I been paid for all of these lessons, or am I giving my time away for free, or is this student taking advantage of my goodwill, or you know, we don't need all of that in our heads, do we? If you decide on a certain number of lessons per year, and then by the end of that academic year, you have actually taught more lessons intentionally, so you've booked more lessons, for example, outside of term time, you can tidy those up with a final invoice that you get to in August, which would be in addition to the regular monthly amount. You can work it like that if you want to, because I know for everyone it's not going to be as straightforward to just pluck a number out of the air. I'm going to teach this number of lessons per year. If you're in that situation, you could go on the lower end of your estimation in terms of number of lessons you'll teach in the year, and then do a final invoice like that at the end to account for any lessons that went over that amount. The only risk with that is then needing to create one extra invoice per student that covers different numbers of lessons, which takes a little bit more time. The way I choose my number of lessons that I'll teach is I base it on the academic calendar, and I choose to teach 38 lessons per year because it aligns with the state school system and gives me the opportunity to start one week later after the start of one or two of the terms, because sometimes you need to have a bit of leeway after the first uh in the first week of term back, especially from summer holidays, to allow things to settle and then music lessons can begin. But it's a completely personal choice, and in fact, I have had conversations with many teachers about a number of lessons taught per year, and some of them over the years decide that they would like to teach fewer lessons, so you can reduce it for each new year in that way. Uh, if you want to teach on a more private school timetable, you could do 30 lessons per year because they have 10-week terms. Obviously, that's a lower income, but if you're comfortable with your lesson fees and you were feeling overworked by doing more lessons per year, it's a good way to reflect actually when you're considering the next academic year, thinking about how you felt during this academic year. Did I teach too many lessons, or did I have capacity to teach more and not feel overwhelmed or burnt out? That way you can review it year on year because each year might be different. Different things happen in our lives. Some years things are more difficult, some years we might need to give ourselves a bit more space, other years we might be raring to go or are saving for something or building a pot for for whatever, and you want to get a little bit of extra income? You can then incorporate that into your plan. So it gives you it gives you the flexibility to do that. Okay, so some teachers asked, What if I still want to refund missed lessons? For example, as in lessons missed by the student. So if the student was sick and you would normally refund them that lesson, can you still do that with a monthly billing system? Yes, you can, but I strongly advise against it because you could still keep the monthly income going and then settle up at the very end of the year, issuing any refunds in one go in a final invoice, but you risk having to give back far more money than you might have anticipated. And this is actually it's a really good way of bringing to your attention just how much income you're giving back when you refund missed lessons for student illness, for example. When you add it all up at the end of the year, it can be a hefty amount. I did a post last year, I totted up how many missed lessons I had logged for my students in that academic year. And because I have a policy in place that means I don't refund missed lessons for those reasons, except uh in circumstances of bereavement, and those missed lessons were not included in this calculation. I ended up saving over a thousand pounds in income just from these odd missed lessons here or there. I think it was 1300 pounds, something like that. I'll have to look up the post. But that's not a small amount, and I don't have particularly flaky students, this was just general run-of-the-mill illnesses that sweep through in different seasons and different family emergencies that might crop up. And this was across a studio of 30 between 32 and 35 students. So I made that post to demonstrate just how much income you are giving away when you refund all the missed lessons, even though at the time it probably feels like a small amount that you can absorb. So I strongly recommend against refunding missed lessons for all these reasons, and I go into it in more detail obviously in episode three of the podcast that you are welcome to go and listen to if you'd like to learn more about that. But this exercise actually makes the cost of this refund habit really visible in a way that the terminal system never does. In the terminal system, when you might carry lessons over to the next term, you can see those terminally invoices shrinking, but it's not quite as obvious because each term is a different number of weeks, so it's not quite so obvious. So, my advice, if it is welcome, my recommendation is that if you're going to switch to monthly billing, I would encourage you to use this switch point as an opportunity to also stop refunding missed lessons. It can be a clean break. The two changes actually work together really well. It keeps things really consistent and it draws a line in the sand that allows you to start enforcing your studio policies if you have them and have not been reinforcing them as I never used to do. It makes it clear that you are taking control of your admin system for your teaching studio. You are a professional and you're running it in a professional way, and your studio policies are as follows. And if you would like to sign up for lessons, this is the way it's going to work. And it really does a lot for helping give you the confidence to stand up for your policies. And I'm saying that as someone who has struggled with self-confidence in this in this respect quite significantly. But that's why I want to tell you about how powerful this change can be, because I'm no longer worrying about my policies. They are established, everybody knows how it works, and I'm not apologizing for them anymore. And my relationships with my students and families are better than ever. So it's a win-win. Alright, so what about students with fortnightly lessons? So there is absolutely no difference to the calculation you do for monthly billing. You still add up the total number of lessons you're teaching that student, which would be about half of the weekly students' total, and divide it by 12, and their monthly fee is therefore about half what it would be. They still pay monthly on the same date by the same method, you still have a monthly invoice going out. They just come for lessons half the time. One thing I would say at this point is to aim for as many students as possible to be on the same monthly fee because it does make logging payments so much easier because you're looking for the same number coming in from most families. Now there will be natural variation. So, for example, I have a few students who have 45-minute lessons, which means their monthly payments are slightly more. I also rent digital pianos out to two of my student families, so they also have slightly different monthly fees. But excepting for those few, everybody else is on the exact same amount. Now, when I have I teach two sets of siblings currently, so from that family they'll pay their monthly fee, which is double that of everybody else, because it's for two students, but really cut down on the number of minutes you spend checking and logging payments, and you get faster and faster at logging these payments against you know, if you use a spreadsheet and/or uh an accounting system. So it's not a brain-heavy workout. You don't finish your invoicing and have to have a lie down or not speak to anyone for an hour. And to be honest, one of the things that is very satisfying is being able to look at your bank account and scan down and see the same figure repeated. It's just one of the small satisfactions of a well-run system. If someone's standing order payment fails, as can happen if it was set up incorrectly or there's some kind of fault. ZohoBooks lets you send reminder emails directly. You can also generate a link that you can send via WhatsApp or text. That's what I normally do. For students who don't tend to check their emails as often, or if I need them to be aware that the payment is late and not wait for them to check their emails, I'll send a WhatsApp or a text. And it lets you generate a unique link to that invoice that they can access from their phone, which makes it much easier than having to go back and find the original invoice that was sent out, download it and screenshot it or attach it. It's very simple, it's much, much more simple. As an aside, if you have a student who consistently pays late, it becomes visible very quickly with monthly billing, which is another one of the advantages. So if you're always having to remind one or two particular students, you could use it as an opportunity to have a conversation with them and just find out why their payments are always late or how you can help them set up a system so that they aren't always having to be reminded. Because it's not nice to send a reminder of I sent you an invoice and you haven't paid me yet, please can you pay me? It doesn't feel very nice, but it's one of those things we need to do as business owners. But if you can reduce the frequency of that having to happen, then it's better for everybody. And it might raise issues that you maybe weren't aware of. It will probably help the student to feel more comfortable if they were having if they were struggling with things. I mean, things that have come out for me in the past when I've had to send reminder emails a couple of times to the same student, is it opened up a conversation that their partner had lost their job and they were between, they were between jobs and so money was a bit tighter that month, and it's not that they couldn't pay, it's just they needed to wait for their payments to come through, their income to come in in order to pay. And that's fine, because once you know, you know you're not being ignored, and your student isn't choosing not to pay you because they don't value you, or that they believe they were owed a refund for a missed lesson or whatever, it opens the conversation that that helps you work with your students and families because life happens, so it's quite a good system in that sense. So, what about families with irregular or mid-month paydays? Now, I have one student who gets paid near the middle of the month, so he requested could he pay for the next month in the middle of the previous month, as in can he pay a couple of weeks early? And yes, absolutely, no problem. I'd always say recommend do it that way around rather than paying two weeks late because then you can't log all you can't log all payments as done by the second or third of the month. And it's just the one student, so I know when I'm checking through the payments, I'll see halfway through the month that one payment came through, and all the rest come through at any time between the 24th and the first. And if it makes regular payments easier for that family who happen to have this odd payday timing, then that's worth making this minor exception for because you're still getting paid on time, you're just getting paid early, and it works with their monthly household bills. So the less friction there is, the better, and that's that's a nice, easy way to be flexible without compromising on your system. I think when I made the switch to monthly billing, the most frequently asked question was about being able to have holiday during term time, and it was with my adult students. So it was an area that tested my ability to stand up for my policies, but having made this clean break, it was a little bit uncomfortable, but it was so much easier than it had been in my head. So, although it's a bit uncomfortable the first time when you say actually no, I can't refund lessons when they are missed because of holidays during term time. You just have to say it clearly, cleanly and directly, and then we all move on and it's fine. But it's a question that has to be answered if you are asked directly, of course. So I just want to give you a taste of what this feels like being on the other side of it. Having experienced many years of terminally billing, and now being on my fourth year of monthly billing, life is so much calmer, so much smoother, less psychologically burdened. So on the first of the month, I open my bank account and I see all nearly all the payments that have come in from all of my students. It's quite a reassuring feeling knowing that that just appears in my account without me needing to actively ask for it every single month. With those automated invoices, I'm also not spending any extra time every month thinking about sending any invoices out. They just happen and it's on a rolling basis until the end of August for me. Summer holidays are so much easier, and you know, Christmas and Easter, there's no income gap. I get paid in July and I get paid in August, just the same as any other month. It's so much easier to plan financially for the year, and the you don't get this feast and famine that you would get that you do get with terminally billing. The fact that so many people have standing orders set up means I am very rarely chasing for late payments. The most it gets to is maybe two or three students. I just click the reminder email button and those payments arrive the same day, if not the very next day. There's none of this, oh, that's a huge amount per term, and we need to wait till next payday to pay it because we can't afford it right now, you know, especially after Christmas. None of us have any money. So having this smaller monthly payment just makes everything run much more smoothly. You don't have to keep chasing for payments. So you feel better about it, and it's not this annoying thing that gets in the way of your relationship with your student families. Oh, the admin freedom that you get from monthly billing. You set up the invoices once and they go. Not having to sit down every term and go back through my diary and see how many lessons were attended, how many were missed, how many am I carrying over to the next term, how many I have I agree agreed to refund directly, no recalculating for different lengths of terms. I just allocate the one hour around the second or third of the month and I log all the monthly payments, and it's done. And then I can go back to exploring more music and more beautiful music books that have arrived in the post. So the most awkward conversation I actually have now with parents is about practice and encouraging their kids to practice. All that stuff about payments and policies and cancellations, it rarely comes up, it just runs in the background because everybody knows how it works. And because I have reinforced my policies whenever questions have come up, I've done so in a professional and clear way, which leaves no room for doubt, no room for argument or ambiguity or negotiation. All of it is clear because this is how I run it, and if you want to have lessons in this studio, you sign to agree to these policies, and that's that. And it's not done in a stamp your foot kind of way, it's done in a you're welcome to have lessons with me, this is how it works. Which feels so much better than trying to grapple with the emotional impact of oh, but I normally refund those lessons if they go away for a school trip, and oh no one wanted to get sick, did they? So I'll refund the lesson even though I don't get paid when I'm sick. It takes all of that burden away. And I think for me, it's it's made a really big shift in the amount of mental energy I have, and you know, we're all almost running on empty these days when things get busy, especially as we get towards the end of the term. And if you can alleviate some of that mental burden by using a system that runs on its own, more or less, once a year you you need to update it, and that's what I'm doing this month. How good is that? You can save a lot of mental energy for the things that really matter. And I suppose the other thing is it has done a lot for my self-perception in a professional sense. It's actually given me a big boost to my self-esteem as a teacher because the system works really well, everybody's happy, my studio is running smoothly and I'm in control of it. I'm not waiting for payments to come in at random times and then hoping that I can pay that car bill that has just come in unexpectedly. Everything is much more controlled, and when I feel more professional, it's a self-fulfilling thing. I believe I am a professional music teacher because I am, because I run my teaching studio in a professional way. One kind of confirms the other. So being able to have better self-esteem when it comes to being a music teacher can only be a good thing. And extrapolating that idea, it actually allows me to be more confident as a music teacher in general because I'm confident in the decisions I've made, and it helps me have confidence in making all those other decisions that we need to make. You know, how to help this particular student progress if they're struggling with practice or with reading or with rote learning, how to make a decision about when a student's ready to start taking the exam, how to have the professional conversation with parents if they're asking for their child to start exams and you know they're not ready. Seeing yourself in a more professional light does wonders for the whole package. And it might seem quite a trivial thing, you know, just how you bill is how you bill. But it really has had a profound impact on my own self-perception as a music teacher. And so having gone through that transition from terminally billing to monthly billing, however trivial it might sound, has actually had a huge impact for me. And if you can experience that too, I I can help you with it. I've produced a lot of information about it. You of course know about the monthly billing transition toolkit, which is linked in the show notes. I have written some blog posts, so if you want to read more about it, you can go visit my blog on my website. I'll put the link to that in the show notes as well. And of course, I'm always here to help individually, one-to-one. If you would like that kind of support, I offer focus sessions which you can book through my website as well. But just taking on the idea that you can bill in a monthly system, even if you teach termally, is one step towards making it a reality, one step towards relieving yourself of an enormous admin burden that is taking up valuable space in your head every single term. And throughout the term, to be honest, when we're chasing chasing unpaid termally fees halfway through the term, that's not a good place to be, is it? But this is the solution and it's it's very accessible. So if you've been sitting there thinking, hmm, monthly billing could be a possibility for me. One thing I would like you to try and do is just work out what your total number of lessons could be for the year. Take your lesson rate and multiply it by the number of lessons, and then divide that number by 12. That gives you your approximate monthly billing figure. It won't be a nice round number, it will be a weird, weird number with decimals, but that's fine. You've got the idea of what you could be charging per month. Just getting that number in your head and visualizing it as how would my student families feel if they paid this every month is the first step towards making this switch to monthly billing a reality. It costs you nothing to do this little calculation, takes you about two minutes and a calculator. Of course, if you want the calculation tool, I've already talked about that. You can access that via the show notes. I also have, if you haven't heard about it by now, the my free studio policy template. It is going to be linked in the show notes. This is going to help you set up your studio policy agreement so that you can protect your time and income, and it works hand in hand with monthly billing to have a smooth, problem-free admin life as a music teacher. So I had no idea a few years back, five, six years back, I had no idea that I could run my studio with monthly billing, being a teacher who only teaches in term time. But you know what? I'm so glad that I made the leap. I have so much more of my time back, my mental energy. I have far fewer uncomfortable conversations and far less having to chase for payments that are late. So I've got more energy to spend all my teaching and engaging with my students and coming up with new ideas and plans forward to solve this or that. It's a much better way to be. And I hope you take it on board and give it a chance. So thank you so much for listening to today's episode all about switching from terminally billing to monthly billing. I hope you found it informative and useful and dare I say it inspiring to make a change, make a positive change for your studio. If you are enjoying these podcast episodes, I would be beyond grateful if you could leave me a review on whichever podcast platform you use. Your review will help other music teachers find this show and find the support that I'm offering and the advice that they might be searching for. And if you know a music teacher who is billing termally and could benefit from this episode, please go ahead and share the episode directly with them. If you have any particular questions to do with today's topic, I always welcome emails. You can send me an email directly, and I read every single one and I respond to every single one, even if it takes me a couple of days to get around to it. I'm more than happy to help. I hope you enjoy your day and I'll see you in the next episode.