Explore practical tips and actionable insights to streamline payments and enhance the educational journey for all involved.
In the dynamic world of aviation, aspiring pilots embark on a journey of achieving the dream of becoming a pilot through flight training. However, amidst the thrill of taking to the skies, there often lurks a common challenge faced by both students and flight schools: navigating the complexities of billing and payments. From missed deadlines to confusion over fees, these payment pains can disrupt the learning experience and hinder student pilot progress. In this blog, we'll navigate through the challenges that flight schools face in billing and payments, exploring effective strategies and solutions to ensure clear skies in financial operations.
Inaccurate Billing
Billing discrepancies, such as errors in flight hours logged or other associated costs, can lead to inaccurate invoices, leading to disputes and delays in payments. Operating between multiple systems such as paper logs, third party processors, and un-integrated accounting software only adds to this headache. A 2023 Forbes study showed 39% of all invoices sent in the U.S. are paid late, and 61% of late payments are due to inaccurate invoices. Both of which are compelling reasons to make sure your invoicing process goes well.
The Solution
Billing Hub with Flight Schedule Pro is a robust solution to bill and receive payment for flight hours and other expenses accurately. By tying the aircraft reservation and the training to the invoice to auto-populate the billed hours based on the hours recorded, both the school and the student have a detailed invoice, while offering the flight operation simple reconciliation with every record linked together. With our premium billing solution, billing mismatches are automatically flagged, making invoice adjustments a breeze before it’s too late and impacts your bottom line in a negative manner.
Billing Disputes
The last thing a school wants is billing disputes. Students may dispute charges if they believe they've been incorrectly billed for services or if there's a discrepancy between what was agreed upon and what's being charged. In a recent study, 78% of c-level executives say their Accounts Receivable team has encountered payment disputes that could have been alleviated with better communication and 64% of c-level executives say an invoice dispute has resulted in a lawsuit or threat of a lawsuit. This is definitely something that all flight schools want to avoid! Overall, invoice discrepancies can result in financial losses for the business. If the invoice amount is incorrect, the business may not receive the full payment that is owed, leading to a loss of revenue. Furthermore, if customers receive an invoice with discrepancies, they may become dissatisfied with the service provided. This can result in negative reviews, loss of business, and damage to the organization's reputation. We already know close to 80% of students who start PPL training drop-out; we do not want to add to that statistic. Finally, these discrepancies create an administrative burden for the business; requiring additional time and resources to rectify the discrepancies and communicate with customers to resolve the issues.
The Solution
Billing Hub provides detailed invoices of each checked-in reservation. When combined with Training Hub, course details will also be found on each invoice. The student or renter has instant access to their own past transactions and aircraft reservations, while also receiving a statement view of the previous month's activity, automatically emailed to their inbox. When paired with user documentation, chargeback win rates significantly increase.
Late Payments
All flight school operators have experienced at least one student, more than likely more, that doesn’t pay on time; or even worse, not at all. This leads to cash flow problems for your flight school. In a QuickBooks study, we have discovered that businesses spend upwards of 14 hours per week, on average, completing administrative tasks related to collecting payments. That’s almost two solid days in a five-day work week of work that could have been spent selling or servicing customers.
The Solution
Billing Hub offers customization within the scheduling and dispatch requirements. This functionality was built so that flight school operators have the opportunity to set special criteria before an aircraft is dispatched, such as minimum account balances or restricting a user from checking out an aircraft or resource if they have an outstanding balance. If the user does not meet the defined criteria, the system will restrict the pilot from doing anything further. Another feature within Billing Hub that helps avoid late payments is Billing Packages. Collect funds upfront for each student pilot’s full flight training journey ahead, and let them focus more on the flying, rather than the finances.
Misunderstandings
Misunderstandings about billing rates, payment schedules, or additional fees can arise due to poor communication between the flight school and the students or renters. Going back to our dropout statistic earlier, according to a recent Forbes article, flight schools experience dropout rates as high as 80% for private pilot students. The leading reason revolves around misplanning on the students side of overall costs. Maintaining a clear communication and invoicing policy is paramount when it revolves around billing rates, payment schedules and additional fees within the training environment to prevent students from dropping out and ensuring they have a clear picture on overall costs to completion.
The Solution
Lock in rates with a billing package and let the student focus on a burn down of hours or bill immediately upon flight check-in based on the service provided. With Flight Schedule Pro’s billing packages, the student can focus on the hours allocated for the license and know the price of a pilot certification up front. Instead of billing by the hour, both parties have a goal in mind of getting the student to where they want to be. If the student finishes with less hours, the school can choose what to do with that money, whether that be a refund, a credit for further training, or recognizing it as revenue to the flight operator for training efficiency.
Delayed Invoicing
Flight schools may encounter delays in generating and sending invoices, causing confusion and frustration for both students and staff. This can result in delayed or even incorrect billing. How does your flight school prefer to invoice? Is it pay as you go, after each flight, up-front, weekly? With so many different invoicing processes and different modes of payment, including credit cards, financing, or GI Bill, it can be hard to keep up to ensure invoicing is happening in a timely manner. These delays in generating and sending invoices cause confusion and frustration for both students and staff. Good invoice management is vital to ensure free cash flow. According to a recent study, about 82% of small to medium sized businesses experienced cash flow problems due to poor invoicing, with 29% running out of cash resulting in business failure.
The Solution
Offering a sneak peak into what Flight Schedule Pro has coming out in 2024, we would like to introduce Automated Billing! With auto billing, your flight operation has the ability to choose what payment schedule works best for the way you do business, whether you bill and process payment as soon as the invoice is created or run on a future schedule and process payments in batches. This new functionality allows you to decrease the amount of time spent each day within the billing process.
The Next Gen of FSP is Bringing a Wave of Innovation to Flight Training
Join Our List to Receive Exclusive Updates
Manual Reconciliation
We have all been there. While closing out the quarter or the year’s books, we notice a discrepancy between what has been billed versus what has been collected. The last thing we want is your chart of accounts not lining up and your team having to dig and spend hours to find one or two missed or partial invoices; which very well could have happened months ago. According to this PWC article, 30% of your finance team’s time is spent on manual reconciliation. Even in top-quartile companies, analysts spend 40% of their time gathering data, not analyzing it. If only there was an easier way to notice these mismatches!
The Solution
Spoiler alert, there is a solution to notice mismatches! Flight Schedule Pro’s existing reservations overview has added power when combined with Billing Hub. Gain an insight into unbilled, billed and paid invoices, as well as billing mismatches directly inside screens you are already using, bridging the two hubs together.
Fee Collection
Are you having difficulty in collecting fees from students who have completed training or dropped out before completing their courses? This is impacting your school's revenue stream. QuickBooks released a recent statistic that mid-sized businesses reported, on average, they were owed $304,066 in outstanding balances. $304,066 USD! That’s, at minimum, one new aircraft to add to your fleet depending on the type of aircraft you prefer.
The Solution
With reporting functionality on billing within Flight Schedule Pro, flight operators have a detailed view into student finances to see which invoices are outstanding, which ones are marked as ‘billed’, and further dive into all of the revenue on the other side of transactions. This gives flight school’s transparency into any outstanding invoices and ensures that revenue is always being collected on time.
In conclusion, mastering the art of flight extends beyond the cockpit—it encompasses efficient management of billing and payments within flight schools. By implementing proactive measures such as automated billing solutions, clear communication channels, and flexible payment options, flight operators can alleviate payment pains for students and administrators alike. Embracing technological advancements and fostering a culture of transparency and collaboration will not only resolve current challenges but also pave the way for a seamless and rewarding educational experience. Together, let us soar towards a future where flight school billing is a breeze, enabling aspiring aviators to focus wholeheartedly on their passion for aviation.
Unlock Savings Potential!
If you do not have a Flight Schedule Pro Merchant Account, request your complimentary Payment Statement Audit.
This audit is easy to complete and is designed to analyze 3 months of your current merchant processing statements. By leveraging our payment team's expertise, we'll uncover potential areas for savings and efficiency improvement within your payment processing workflow.