Reducing late payments at your dance studio

Before writing any payment policy, you need to know what the law allows. Quebec's Office de la protection du consommateur (OPC) states that its rules on courses cover contracts for a series of courses, and it explicitly names dance classes among its examples. Excluded, among others, are courses offered by municipal recreation services and those an educational institution gives as part of its educational program. A private dance studio enrolling children in a fall session is therefore, as a rule, squarely within scope.

According to the OPC's pages for merchants, four rules directly affect how you collect payment:

• You cannot ask for fees when the contract is signed unless you provide the services immediately. The first payment is collected when classes begin.
• Payment must be made in at least two roughly equal instalments, requested at regular intervals, for example at the beginning and middle of the session.
• You may not offer a discount to encourage a family to pay everything in a single instalment.
• A single payment is still allowed if the total value of the course is $100 or less, taxes included, or if the course runs over three consecutive days or fewer.

Most late payments come from a grey area: the family didn't know the second instalment was due in mid-October, or thought they could pay at the June recital. So the first step is to put the rules in writing and hand them out at registration, not after the first late payment.

For courses covered by the law, the OPC requires a written contract anyway. It must state, among other things, a description of the services, the start date of classes, the length of the session, the total amount payable and the terms of payment, along with the cancellation notice and an attached cancellation form. The total amount must include the cost of the course, any registration or administration fees, and taxes. Use this mandatory document to spell out your due dates, the payment methods you accept and who to contact in case of difficulty.

Since the law requires at least two instalments for a session of classes, you might as well make it work for you. Take a 15-week fall session at $480: two instalments of $240, one in the first week of classes and the other in the eighth, follow the principle of payments at regular intervals. Some studios choose three or four smaller instalments, which fit more easily into the budget of a family with two kids.

Automatic card payment, set up at the first class and charged on each due date, greatly reduces forgotten payments: the family has nothing to do, and you have nothing to chase as long as the card is valid. Just give the family notice a few days before each charge to avoid surprises on their statement.

One caution: the deposit required at registration, common in many studios, conflicts with the rule that prohibits asking for fees at signing when classes haven't started. If your policy includes one, have it reviewed.

A family that has to find a chequebook, come to the studio during front-desk hours or copy out a transfer number will put off paying. Every step you remove reduces late payments. Offer at least one way to pay online by card, from a phone, and keep a simple option for those who prefer to pay at the front desk.

Put the payment link right in every reminder. A parent reading your email in the stands during their daughter's class should be able to pay in a minute, without hunting for a password or calling the studio.

The most effective reminder is the one sent before the due date. It doesn't chase a debt: it gives notice. Tone matters: a short, friendly and precise message works better than a curt notice that puts parents on the defensive. Also respect the channel each family has chosen, email or text message.

Here is a simple schedule to adapt to your situation:

• Five days before the due date: a friendly reminder with the amount, the date and the payment link.
• On the due date: a short message to families who haven't paid yet.
• One week after: a second reminder, still friendly, inviting them to write to you if they're having trouble.
• Two weeks after: a phone call or a meeting, rather than a third email.

A job loss, a separation or an unexpected bill can happen to any family. When a parent tells you, offer a written arrangement: a new schedule for the balance, with specific dates. Handle these conversations discreetly: neither the teacher nor other parents need to know a family has a balance, and the child should never hear about it at the studio.

For repeated delays with no explanation, decide the consequence in advance and write it into your policy, for example that an unpaid balance blocks re-enrolment for the next session. Removing a child from a class in the middle of a session is a weightier decision, to be checked before you apply it.

Late fees and interest call for the same caution. The law closely regulates what a course contract can include: the OPC states, for example, that you cannot set in advance in the contract a penalty for a student's absence. Before adding late fees or interest to your policy, check with the OPC or a lawyer.

A late payment sometimes hides a family that wants to leave. Better to know the rule: according to the OPC, the consumer can cancel their registration at any time. Before classes begin, you cannot claim any fees. After they begin, you can claim the cost of classes already taken and a penalty equal to the lesser of $50 or 10% of the price of classes not yet given. You then have 10 days from the sending of the cancellation notice to refund any amount owing. With the $480 session above, cancelling after five classes means $160 for classes taken and a $32 penalty, which is 10% of the remaining $320.

Finally, keep a record of every payment: date, amount, method, and a receipt given to the family. That is what settles disagreements over a balance, and it is also a tax obligation. The Canada Revenue Agency states that, as a general rule, records and supporting documents must be kept for six years from the end of the last tax year they relate to.

Cadanse helps you apply these principles without a spreadsheet. Families pay by card from their portal, through Stripe or Square connected to your own merchant account. You can spread a registration over monthly or biweekly instalments, and automatic payment reminders go out by email or text message according to each family's preferences. Every payment has a clear status (paid, pending, refunded), with numbered invoices and receipts, so you can see at a glance who has paid.

Cadanse is not a lawyer: it doesn't draft your contract or validate your policy for you. Applying the OPC's rules remains your responsibility.