by Douglas Schoenberg
Collecting and processing payments — your camp's financial health depends on it! It can also be a time-consuming and burdensome administrative task. Fortunately, it's an area where the smart use of technology can provide dramatic benefits.
Effective Accounts Receivable and Billing Systems
The first important technology for managing and collecting fees is an effective and efficient accounts receivable system. Today, most camps use some sort of computerized accounting system but still struggle to manage payments with a spreadsheet or general-purpose database. Such general-purpose programs often lack critical features for camps such as the ability to:
- Maintain a complete payment history.
- Produce simple invoices that can be printed or e-mailed.
- Generate aging reports of who owes money and for how long.
- Automatically calculate and post standard fees.
- Quickly post payments and produce bank deposit slips.
- Audit when and by whom transactions were posted.
- Track canteen deposits and charges separately from other charges and payments.
Even with a good accounting system, fee collection can be time-consuming, but offering parents the ability to pay electronically can dramatically reduce the workload.
Offering electronic payments makes sense for most camps, because you can collect payments more quickly and with less effort. Parents love the convenience as well as perks, such as airline mileage, that credit cards provide. Electronic payments can encompass not only credit and debit card payments, but also payments by direct bank account debit via the Electronic Funds Transfer (EFT) network.
Electronic payments can be pre-authorized to be made automatically when due, or parents have the option to initiate each payment. Parent-initiated transactions can be processed by your staff or directly by parents online.
Pre-authorized Versus Parent-Initiated, One-Time Payments
Pre-authorization indicates that parents agree to have their payments made automatically when due, thereby reducing the work for both parents and camp administrators.
To manage pre-authorized payments most effectively, you will need software that provides for the following features:
- Securely encrypts and stores credit card or bank account data.
- Automatically generates and sends for processing transactions when due.
- Allows for amounts that can vary, based on balance and payment plan selected.
- Handles both credit cards and EFT transactions.
- Integrates with your accounts receivable system.
While pre-authorized payments are the best way to ensure timely collections, electronic payments also make parent-initiated payments more convenient.
Online Versus Staff-Processed Transactions
Collecting the Correct Payment Amount
The simplest approach is to use a physical or electronic invoice to communicate the charges and amount due. Some systems even provide a “pay online” link within electronic invoices to take parents to a pre-filled online payment form.
For staff-processed transactions, integration with your accounts receivable system makes it easy to ensure the payments are processed for the full balance due.
Reducing the Risk of Human Error
Real-time authorization where the card number, expiration date, and available funds are validated immediately is critical for online or staff-processed transactions. This way, any data entry error or need for a different credit card can be identified and corrected immediately.
Of course, the best solution is eliminating the need to enter the credit card data each time. Since parents usually use the same credit card or bank account, the solutions that allow saving the account information so it doesn't need to be entered each time, achieve this. The challenge is doing this in a way that is secure and protects this sensitive data.
Ensuring Data Security
The credit card industry continues to impose tighter rules on the handling and storage of credit card data. In brief, any credit card data that is to be stored must be secured. In computer terms, this means both password protected and encrypted, with similar protection of paper records that include credit card information. Any online payments have to be processed on secure Web-servers (note: you can tell if the site is secure by seeing if the Web address starts with “https:”, not just “http:”).
Keeping a list of parents' cards to process or using e-mail to receive credit card data are bad practices that put parents' information at risk and expose your camp to fines.
Maximizing Administrative Efficiency
To eliminate the need for any double entry of payments, you'll want processing solutions that post the payment automatically to the parents' ledger in your accounting system. Non-integrated solutions not only mean more work, but also increase the potential of human error.
Here are a few other features to look for to simplify payment administration:
- Payment receipting via printed or e-mailed receipt
- Ability to review completed (as well as non-completed) payment transactions
- Ability to issue any necessary credits/refunds
- Online tools for reporting and analysis of transactions
Pitfalls to Avoid
Credit Card Terminals
Physical credit card terminals were designed for face-to-face retail transactions and are ill-suited for processing camp payments because:
- They require keying of card data, which is time-consuming and error-prone;
- They don't provide a method to securely store card data for future transactions;
- They require separately keying payment data into your accounting system – this also creates the need to reconcile amounts between systems; and
- They don't provide e-check (EFT) processing.
Stand-Alone Processing Solutions
Many of the benefits of electronic payments diminish if you use payment-processing solutions that do not integrate with your accounting software. Typically, they require you to:
- Enter and maintain the same contact information in two places;
- Don't ensure that amounts paid match balance due; and
- Reconcile transactions between multiple systems.
Non-Secure & PCI Compliant Systems
If payment account data is stored on your computer, it is critical that it be encrypted to protect it from unauthorized access. An even better method is for account data to be stored on a PCI compliant server maintained by your processing service, with a solution that allows you or your parents to initiate charges to the stored account without needing to re-enter the data.
Hopefully, you now have a better understanding of how convenient and efficient processing of electronic payments can truly be for both parents and camp.
Douglas Schoenberg is CEO of SofterWare Inc. He has spent over twenty-five years working with technology for camp administration and pioneered the use of electronic fee collection for camps. He has written numerous articles and presented at dozens of national and regional camp conferences. He can be reached at 800-220-4111 or firstname.lastname@example.org .
Originally published in the 2008 November/December issue of Camping Magazine.