Package Billing FAQs: Using A Combination Of Package And Hourly Billing

Package billing is a great choice for tutoring companies wanting to sell packages of lessons/hours to their clients that can be used over an undefined period of time. Many of our clients use a combination of billing methods, such as package billing and hourly billing, to provide their clients with more options.

In this second article in our Package Billing FAQ series, we’ll answer the following question: “My client would like to sign up for one of our hourly billed services in addition to their package lessons. How do I manage this?”

What is Package Billing And How Does It Differ From Hourly Billing?

With Package Billing, package invoices are generated in advance for a number of lessons/hours. These lessons or hours can be used over an undefined period of time and package balances are reduced as lessons are scheduled and completed.

Hourly billing on the other hand allows you to charge your clients an hourly rate for their individual lessons. With this billing method, you can generate invoices and pull lessons from the calendar on to your invoices. You can invoice in advance, or you can invoice after lessons have occurred.

To find out which billing method is right for your business, you can view our cheat sheet here: Teachworks Billing Methods and Cheat Sheet

The Solution to the FAQ:

To address this FAQ, the following steps need to be followed:

1. Set the student’s billing method to the option that will be used most frequently
2. Enable the “Cost override” feature on the Account Settings page
3. Make sure the package service differs from the hourly lesson service you’ll be using 
4. Generate invoices for the lessons that are billed hourly

In the sections below, we will look at each of these steps in more detail.

Step 1: Set the student’s billing method to the option that will be used most frequently

You can set a student’s billing method directly on their profile. If most of the student’s lessons will be package lessons, you can set it to “Package”. If most of the lessons will be billed hourly, you can choose either the “Use Service List Price” or “Use Student Profile Price” options depending on your requirements. Doing this will make scheduling more efficient.

Step 2: Enable the “Cost override” feature on the Account Settings page

In step 1, you selected the billing method that will be used for most of the student’s lessons. Enabling the cost override option will make it possible to select the other billing method for specific lessons.

For example, if a student’s billing method is set to “Package”, the cost for all of their lessons will be set to zero. If you would like to schedule lessons with an hourly rate, you can use the cost override option to choose the “Service List Price” or “Student Profile Price” option. This makes it easy to bill for individual lessons later on.

You can enable the “Cost override” feature by going to Account & Settings > Account Settings > Cost & Wage Settings > Cost override > Enable.

Step 3: Make sure the package service differs from the hourly lesson service you’ll be using 

Package balances are reduced when lessons with a matching service are scheduled in the calendar (i.e. the service selected on the package invoice).

If you have a very general service, such as “English Tutoring”, and you assign this service to all of the student’s lessons, the package balance will be updated every time a lesson is scheduled or completed. 

Fortunately, the solution is easy – you can add two services. One service will be used for packages and package lessons, and one will be used for hourly billed lessons. For example, you could have “English Tutoring” and “English Tutoring – Package”. 

Step 4: Generate invoices for the lessons that are billed hourly

Now that the hourly billed lessons have been scheduled with the appropriate costs, you can generate invoices using one of our many invoicing options. You can create a single invoice, multiple invoices at once or automate it entirely using our Invoice Autopilot Add-on. 

The following article has more information: Simple Invoicing Solutions For Your Teaching Business

Let’s Summarize The Workflow:

The easiest way to illustrate the workflow is to use a practical example: 

“Riley has mostly package lessons with occasional lessons that are billed hourly. The service list is used to set the cost of the lessons that are billed hourly.”

1. Set Riley’s billing method to “Package”.
2. Ensure that there is a unique service for packages to prevent balances from being reduced by accident.
3. Use the cost override feature and select “Service List Price” when scheduling lessons that will be billed hourly.  
4. Once lessons have been added to the calendar, generate invoices using one of the various invoicing options in Teachworks.

In the next article in our Package FAQ series, we’ll answer the following question: Why do old lessons count towards my client’s new package balance?

You can access the other articles in this series below:

• Package Billing FAQs: How To Transfer Package Lessons Between Packages
• Package Billing FAQs: Past Lessons Reducing New Package Balance
• Package Billing FAQs: Tracking Package Balances Efficiently

Comments are closed.