Package Billing vs Billing Per Lesson
Teachworks supports a range of billing methods to make it possible to bill your clients using your preferred method.
Two of the most common billing methods used by our clients are Billing Per Lesson (Hourly) and Package Billing. This article will look at these options in more detail and we’ll also address some popular questions related to them.
Per-Lesson Billing (Hourly)
What is it?
Per-lesson hourly billing allows you to set an hourly cost for each lesson that you add to the calendar. The cost is based on the settings that you customize on each student’s profile.
Currently, two methods are supported in Teachworks:
- Use Student Profile Price – this billing method allows you to set an hourly lesson cost directly on student profiles. The cost on the profile is used to calculate the cost of each lesson that is scheduled for the student in the calendar. If you would like to charge your students the same fee regardless of the type of lesson or the teacher/tutor assigned to the lesson, this is a great option.
- Use Service List Price – this billing method will look at your Service List settings to determine the cost for each of the student’s lessons. The Service List allows you to specify an hourly cost for each of your different services. This option is useful if you would like to charge your students different rates for different services.
If you offer a lot of variation in pricing, you can use the Service List Price option and create service variations. Alternatively, this can be updated manually as needed.
Who should use it?
Per-lesson hourly billing is ideal if you want to charge clients for each of their individual lessons upfront or after lessons have been completed.
What about invoicing?
All of the invoice features in Teachworks support a “Lessons by Date” option that allows you to pull lessons (with their associated costs) onto invoices using a custom date range. You can also choose to include lessons by status.
If you want to automate invoicing entirely, you can use the Invoice Autopilot Add-on to generate invoices in advance or after lessons have taken place. You can find more information here: Automate Billing With Teachworks Invoice Autopilot
What is it?
With Package Billing, students are billed upfront (through an invoice) for a package of lessons/hours for a particular service. These lessons can be used up over any period and usage is tracked in the Package Balances table. When a package runs out, you can create more invoices to top up the balance.
Since billing is tied to a package invoice as opposed to individual lessons on the calendar, you will want to set the Billing Method on package student profiles to “Package”. Doing this, will set the cost of their individual lessons to zero automatically and will ensure that no double billing occurs if they are accidentally selected when generating invoices.
Who should use it?
This billing method is a great choice if you would like to sell packages of lessons/hours to your students to use on a flexible schedule. It offers detailed lesson tracking and makes it easy to see how many lessons students have scheduled and used as well as their remaining balance.
What about invoicing?
As we’ve mentioned earlier in this section, package billing requires an upfront invoice and you can generate these one-by-one or in bulk.
Automating invoicing for packages is not really recommended since students will run out of lessons at different times. However, if you know beforehand that students will have a specific number of package lessons each invoice period, then it might be suitable for your requirements.
To keep track of students that need to be invoiced for more lessons/hours, you can use our Package Balance Alerts Add-on to notify you when it’s time to invoice.
Considering the Package Billing Method for your business? Here’s a dedicated article to get you started: The Package Billing Method
Popular Billing Questions
Effective billing is an important part of running a successful tutoring business. For this reason, we receive many billing related questions from our clients and those evaluating software options. In this section, we’ll look at some of the most common questions in more detail.
Can I use a combination of different billing methods?
Absolutely! Many of our clients use a combination of billing methods to accommodate their clients’ billing preferences. You can bill clients for packages, individual lessons and fees as needed.
- Package Billing vs. Billing per Lesson
- Package Billing Method (see “8. Billing a client for packages and individual lessons”)
How do I switch from per lesson billing to package billing?
Package balances are reduced when lessons with a matching service are added to the calendar. If a student had 10 hourly billed math tutoring lessons in the past for example, those 10 lessons will be deducted from the package immediately if the same service is selected on the package invoice. Some initial setup is required, but fortunately there are two easy options:
- Option 1: Archive the student’s previous lessons – this will ensure that they are not deducted from the new package. Here’s how: How to Archive Packages/Lessons
- Option 2: Create 2 service variations, one for packages and one for hourly lessons (“Math Tutoring” and “Math Tutoring – Package”). This option is good if you will still schedule occasional hourly-billed lessons.
Can I use hourly billing for lessons that are shorter or longer than an hour?
Yes! Hourly rates set on student profiles or in the service list are adjusted automatically based on the duration of lessons. If lessons are typically 45min for example, you can set the equivalent hourly cost to ensure it’s set correctly when lessons are scheduled. Here’s a guide to help you get set up: Setting Hourly Cost for Lessons Longer or Shorter than One Hour
Can I charge my clients using a subscription model?
The article above looks specifically at hourly billing and package billing. However, Teachworks also supports Flat Fee billing which will perfectly support a subscription model. With this billing method, you’ll create an invoice with a charge for a particular time frame. You can learn more here: Flat Fee Billing Method Overview
Not sure which billing method to use for your tutoring business? Here’s a cheatsheet to help you decide: