In collaboration with ECSI, this article was written by Higher Ed Dive and was originally published on highereddive.com.

The scope and scale of accounts receivables in higher education have never been larger. While manual processes for tracking and following up with student debt might have been sufficient in the past, institutions enroll potentially hundreds of thousands of students and manage millions of dollars in past-due accounts today. Every institution needs a stronger fiscal foundation to thrive.

“We’ve seen that many schools don’t have the tools or the bandwidth to dedicate appropriate resources to chasing past-due receivables,” says Becky Budner, ECSI’s senior manager of program management. “It is one of those things that’s tough to manage but has significant outcomes when done correctly.”

The universal challenge: Lack of tools and tech to manage the AR process

One significant limitation is time. About 74% of higher ed officers indicate their teams only spend 10-24% of their time attempting to recover delinquent tuition and fees. During this limited time, administrators face a number of challenges, including difficulty finding students with lapsed accounts, an inability to access financial data and problems communicating or coordinating across departments and campuses. For instance, survey respondents noted that they often don’t have a centralized source of knowledge about which students have past-due accounts, how much they owe and where they are in the outreach process.

Lack of secure financial data and/or visibility into that data poses another major challenge. Multiple respondents noted how difficult the lack of secure data makes recovering past-due tuition and reaching the students who need support. “The most difficult barrier is insufficient financial data,” one respondent said. Others pointed to ineffective tools for tracking data. “The biggest challenge is using outdated and not very effective financial software,” another said.

Unpaid tuition and fees are about more than cash flow for institutions. Recouping tuition dollars from delinquency in a sensitive and supportive way allows institutions to secure re-enrollments, improve the student experience and fund much-needed services and programs.

The next step: Suggested priorities for evaluating AR technology

It’s not enough for institutions to offer payment plans — these plans might not cover enough or be flexible enough to help students with their needs. Instead, institutions must actively decide which resources and technologies to deploy to help students pay delinquencies and help staff provide proactive, clear, consistent communications. By empowering AR administrators with the right technology and tools, institutions can proactively support their students’ financial journeys and protect enrollment numbers.

However, not all solutions are created equal. The right technology can help accounts receivables (AR) functions address this challenge to improve institutional financial stability and students’ experience. Read the full article on Higher Ed Dive to explore these new technologies.

For more insights on accounts receivables policies and outreach strategies in higher ed, check out the full survey report.