Using the aged fee report to decide the next step
How a school can read its aged fee report band by band to decide when to start collection, when to hand an account over and when to write it off.
By Achekam · · 5 min read · For Education businesses in South Africa, Nigeria, Kenya
By the middle of a school year, the bursar's arrears list is a mix of very different situations. One family is a week late because a salary was paid on the wrong day. Another has paid nothing since the first term and stopped answering e-mails. A third left the school last year with a balance nobody followed up. On a single list sorted by name, they look alike.
The aged fee report sorts them by how long each amount has been unpaid, and that turns a list into a set of decisions. Used well, it tells the bursar which families need a friendly reminder, which need a meeting, which should be handed to a collector, and which balances the school should stop pretending it will collect.
What each age band tells the bursar
AccountingTools defines an aging schedule as a report that groups receivables by their creation dates to show which items are overdue. It explains that the schedule is typically divided into 30-day categories, with current items in the 0-30 days category and moderately overdue items in the 31-60 days category, and notes that accounting software may let a user set different day ranges. Its guide to the aging schedule describes how the report is built and the collection, write-off and credit decisions it supports.
In Achekam, receivables are aged into 0-30, 31-60, 61-90, 91-120 and over 120 days, with overdue totals. For a school, the bands read roughly like this:
| Band | What it may mean for a family |
|---|---|
| 0-30 days | This term's invoice, recently issued or just due |
| 31-60 days | A payment missed; perhaps an oversight or a short-term problem |
| 61-90 days | A pattern forming; the family may be in real difficulty |
| 91-120 days | Most of a term unpaid; informal efforts have not worked |
| Over 120 days | Unlikely to be paid without formal action, or at all |
The bands describe the debt, not the family. A family in the 91-120 band may have a perfectly good reason; the band tells you it is time to find out.
A rule for each band
AccountingTools explains that a receivables aging is used to decide when to start collection activity on overdue accounts, when to write off a receivable as a bad debt and when to refer it to a collection agency. A school can turn that into a written rule for each band, approved by the governing body so the bursar is not making it up family by family:
- 0-30 days: no action beyond the normal invoice and statement.
- 31-60 days: a personal reminder from the bursary, by e-mail or phone, asking whether there is a problem.
- 61-90 days: a meeting with the family, and an agreed payment plan in writing if one is needed.
- 91-120 days: a formal letter of demand under the school's fee policy, and a decision by the finance committee on whether to refer the account to a collector or attorney.
- Over 120 days: referral if not already made, and a review of whether the balance should be provided for or written off.
What a school may lawfully do at each step, and what it may not, depends on the country and the type of school; take advice before introducing formal collection steps. Interest on late fees is a separate decision, covered in interest on overdue fees.
Using age to estimate the fees that will not be paid
AccountingTools notes that a receivables aging can be used to estimate total bad debt, and so set the allowance for doubtful accounts. For a school, the year-end question is how much of the arrears it really expects to collect.
A practical method is to look back at past years: of the balances that were over 120 days at one year end, how much was eventually paid? Of those in the 61-90 band, how much? Apply what the school has actually experienced to this year's bands, and agree the result with the school's accountant or auditor. The point is to stop the financial statements carrying fees that, on the school's own history, are not coming in.
Credit decisions for next year's enrolment
AccountingTools also says an aging can help the credit department decide whether to grant a customer more or less credit. For a school, "more or less credit" can mean the terms offered for the next year:
- a family that paid everything within 30 days can keep monthly instalments;
- a family that drifted into the 61-90 band but kept to an agreed plan may need a deposit or a debit order before re-enrolment;
- a family with an unresolved balance over 120 days should not be re-enrolled on credit until the governing body has decided how to handle the arrears.
Make those rules part of the re-enrolment process, so they are applied at the same point every year rather than discovered in February.
Age bands and reminders in Achekam
Two things in Achekam do the routine work, leaving the bursar the judgement calls.
Automatic reminders. Credit control is on for new workspaces. Once a day it e-mails overdue reminders, and a monthly statement, to customers with a balance. It never charges anyone and records whether each e-mail went out. By default, reminders go at 7, 14 and 30 days overdue with the invoice PDF attached, provided the workspace's e-mail settings work. That covers the 31-60 band's first contact automatically; the bursar's personal call adds the human part.
Clearing old balances properly. An administrator can void an issued invoice that has no payments or credits, which reverses its journal; that is for invoices raised in error, such as a fee for a pupil who never started. A genuine unpaid debt is different: it can be written off once a partner approves it, so decide in advance who in the school holds that approving role. Families paying by arrangement are covered in fee instalments and part payments.
At the next finance committee, table the aged fee report with this band-by-band rule beside it, and ask the committee to approve the rule before the bursar applies it.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
