Earlier this year, I decided to shift to monthly billing, charging my students a monthly, recurring flat-rate for their piano lessons.
Previously, like many teachers, I’d been charging on a lesson-by-lesson basis so, if a student had four lessons in a month at $50 per lesson, they’d be charged $200, etc. But if they missed one or there was a public holiday, they would be charged $150.
As you’ll see below there are a number of key disadvantages to this approach to charging, so in this article, I want to show you step-by-step how you too can simplify your billing process to the point of complete automation. In this post, you will also be able to find a video demonstration for how I charge my piano parents.
I guarantee you will never look back!
The Problem with Charging by the Lesson
The biggest issue with this system is that you don’t get any continuity of income, especially over summer months when you or your students might be on holiday.
I never considered it an option to charge for each individual lesson, because unlike plumbers, dentists and auto mechanics, we teachers must rely on very small group of clients each week for our livelihoods, which means empty slots can’t be filled by clients who call each week. If a student wishes for a teacher to commit a time slot to them each week, the student must commit to paying for it each week. Chat Twedt.
If you’ve found yourself struggling with continuity of income during certain parts of the year, then this could be a valuable solution for you.
Charging by the lesson can also get complicated when:
- Students are ill or forget to show up
- There is a public holiday on their lesson days
- Students are away or on camp, etc.
The Advantages of Recurring Monthly Billing
There are so many advantages to recurring billing, both for parents and for you:
- You can automate the payments with software so you never have to worry about it (see video demonstration below)
- It’s transparent: parents know exactly what they’ll be charged each month so there are no surprises
- You’ll know exactly how much income you’ll generate each month
- You’ll get paid over summer, even if you’re not teaching (depending on how you want to set this up)
- No money exchanging hands during a lesson or talk about lesson costs in front of students
- You can include admin/personal development costs in the charges for students and split this over the year for parents
Here’s a comment I read on a blog post about this from Angela:
Aside from budgeting reasons, I made the switch because what we do is a course of study, not a doctor’s appointment. When you take a class at the park district or in college, you pay for the class as a whole, not for each individual session. You don’t get credit on your bill if you miss your Wednesday class. I think it helps convey the idea that music lessons are a long-term commitment and curriculum.
Setting up a Studio Policy
You need to be honest and clear with your students’ parents about monthly billing. A good way to do this is by setting up a studio policy.
One of the first things you’ll need to do in order to change your billing process is be very open with parents as to:
- what the changes are
- how it will impact them
- how they need to set things up
- what the policies are for missed lessons
When I moved to this system, I started talking to parents in lessons about this and followed-up with an email explaining things and linking to my policy in detail.
If you’d like to access my own full studio policy, it’s available to all members of my Inner Circle in our community forums. Otherwise, if you’d like to explore what other people add to their policies, feel free to Google “piano studio policy”.
Here’s a short version of what I say about monthly tuition:
Tuition is spread equally over the course of a year and charged each month in advance. The monthly payment amount is divided evenly between the 11 months from February to December. This means that whether there are 5 or 2 lessons in that month, the tuition fee is exactly the same. Weekly students are allocated 35 lessons per year, fortnightly students will be allocated 17 lessons per year. Eg. If hourly lessons are $100 each and a student is having lessons weekly, their monthly charge will be $100 x 35 lessons = $3500/11 months = $318.20 per month.
Regardless of how you’re charging for lessons, it’s important to be clear about your make-up policy.
There is great conjecture about the best way to manage make-up lessons. I personally don’t offer make-up lessons but many teachers do. Ultimately, you’ll have to decide how you’d like to approach this.
There are lots of articles around the web on this topic as well. Here are just three you might like to take a look at as you consider your own policy stance:
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- Make-up Lessons from an Economist’s Point of View: This article went viral a few years ago, making the case for not offering make-up lessons. The author is both a university lecturer and a mother of a music student and she says:
In my ‘other life’ I am an economist and teach at our local university. Students pay good money to attend classes at the university; but if they don’t come to my lecture on a Monday morning, then I am not going to turn around and deliver them a private tutorial on Tuesday afternoon. When I go to the store and buy groceries, I may purchase something that doesn’t get used. Days or months later, I end up throwing it out. I don’t get a refund from the grocery store for the unused merchandise. If I sign my child up for swimming lessons at the local pool, and s/he refuses to return after the first lesson, I can’t get my money back….During May, my eldest son will be missing three lessons because he is going to accompany me on a trip to New Zealand to visit his great-grandparents. I do not expect my son’s teacher to refund me for those missed lessons, or to reschedule them by ‘doubling up’ lessons in the weeks before or after our departure.
- The Case Against Offering Make-up Lessons: Another article supporting a no make-up policy, this time from the Music Matters blog.
- Thinking Twice About Strict Make-up Lesson Policies: A completely opposite view that’s well thought-out and will provide more food for thought.
How to Set Up Flat-Rate Billing
If monthly recurring billing makes sense to you and you’d like to try it out, just follow this step-by-step plan:
- Work out how many lessons you want to teach each student in a year. If teaching weekly, then I offer my students 35 lessons each year (17 if having fortnightly lessons). You may well teach more than this, but with my speaking and travelling commitments, this suits my timetable.
- Multiply this number of lessons by your hourly rate to get the annual income from that student. Eg. 35 lessons x $100 per hour = $3500. This is how much money you’ll make from each hourly student during the year.
- Divide this figure by 12 to get the monthly payment they’ll need to make. Eg. $3500/12 = $291.67. This is the amount you’ll charge parents each month for a one-hour lesson time slot. If you only plan to teach 11 months of the year and say, take one month off, then you can divide this by 11 instead and only charge parents for the 11 months of the year.
- Set this up as a recurring charge in your studio software so that parents get billed this amount automatically at the start of each month without you having to do a thing.
I recommend MyMusicStaff as the simplest way to set this up automatically in your studio.
If you’re still using paper and pen or spreadsheets to track your income and sending invoices manually, then please stop wasting your time. There are much more clever ways to do this that don’t take a lot of learning or cost very much at all.
Here’s how you can set it up in MyMusicStaff:
If you’re interested in moving to MyMusicStaff, you’ll be able to access an exclusive discount as a member of my Inner Circle. Find out more here.
Before you jump in and start making changes, please keep the following in mind:
- Make sure parents are aware that they will still be charged this amount each month, regardless of how many lessons are in the month. Eg. If the month has five weeks, they’ll still be charged the same. If you’re away for an entire month and there are no lessons, they’ll still be charged the same amount. Make this clear up front so parents don’t get any shocks.
- Also, make sure you keep clear attendance records so that you know how many lessons you’ve given.
- Make your calendar clear and open to everyone so they know when lessons are occurring. Again, using MyMusicStaff gives all students the ability to view your calendar.
- If you’re getting close to the end of the year and you haven’t offered your students the stated number of lessons, you may need to schedule extra lessons to catch up or you’ll need to reimburse parents. I recommend therefore aiming to hit half of your lesson numbers after 6 months to make sure you’re on top of that.
Download My Free Monthly Billing Template
I also recently did a live Facebook video on exactly how to use this template. You can see a replay of that below.
Do You Charge Monthly?
I hope you’ve found this guide helpful. It has made a huge impact in simplifying my studio policies and procedures and, so far, everyone is happy.
How do you charge for piano lessons? Do you charge on a monthly basis? Do you offer make-up lessons? Leave your view and any questions in the comments section below.