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A Complete Guide to Managing Child Care Billing

The child care billing process at your daycare, preschool, or after school program can be a complicated and time-consuming operation. With staff looking after kids and planning lessons, and busy parents running out the door, it is easy to lose track of billable care hours for each student and any additional fees that may be accrued.

It can even be a challenge to track down parents and guardians to collect their checks or payments. However, having a consistent cash flow is key to running a successful business, which means that no matter what, time has to be made to organize and collect payments from parents.

There are a lot of considerations that go into the child care billing process aside from collection. Child care providers have to thoughtfully choose their billing rates and structure based upon a multitude of factors, as well as come up with a system to track payments, fees, and credits.

How to Manage Child Care Billing

To simplify this process for child care providers, here are some top considerations and tips for child care center owners as they build out their billing protocol.

Setting a Child Care Rate

Financing Your Daycare Center

Setting the price for care at your daycare center can be tricky. Center owners must find the right balance of what is reasonable for parents, and what is required to keep the center running and providing high-quality care.

It is important to remember that many parents will plan their child care budget out far in advance. Therefore, increasing your billing rate, though sometimes necessary, can be a major inconvenience for parents. That said, it is important that providers be as thorough as possible when pricing their services, to avoid unforeseen price hikes in the future.

First, when mapping out your child care billing rate, factor in how much your space and materials cost. To earn a profit, the payments from each family have to cover the cost of your space, utilities, and supplies such as snacks, games, and crafts for the kids. When assessing these costs, keep in mind seasonal expenses such as the cost of heat in the winter and air conditioning in the summer.

Of course, this money will also have to cover payroll for your staff. The number of instructors centers have to employ will depend on the number of children, and the required student to teacher ratio. As such, center owners will have to keep a record of enrollment numbers as well as tracking enrollment projections to ensure they are not overstaffing, resulting in greater expenses.

Finally, owners must also factor in the prices charged by other care providers in their community to ensure their prices are competitive, as well as the average income in the community to ensure they are not be pricing their child care out of range.

Determining Billing Frequency

Child Care Payments

When it comes to payment structure and how often parents will have to pay, child care centers have many viable options. Among the most popular are weekly, monthly or tiered, which is based on attendance. This might mean paying a flat monthly or weekly rate, or paying on a weekly or monthly basis for the hours of care accrued. A daily tiered, or stepped up rate, means different flat rates for up to a certain number of hours, after which the rate increases.

When deciding how often to bill parents, it’s important that it aligns with how often you pay bills and staff; to ensure your payment structure will support your business on a monthly basis. For example, if you plan to pay staff twice a month, but collect from parents at the end of each month, this could present some issues. To ensure a stable billing structure, you will have to align your enrollment, how often you pay staff and bills, and how often you want to collect from parents.  

Tracking Child Care Billing

child care management software

Regardless of the billing structure chosen by individual child care centers, the most important aspect of billing is that the center is adequately compensated for work on a regular basis. This means keeping track of the number of hours each child attends the center, tracking fees for late pickups or additional costs such as field trips and class outings.

For child care centers to continue to run and be successful, it is necessary that these costs are accounted for, and paid in a timely way. Conversely, maybe your center offers discounts to families that have multiple children enrolled. When tracking costs, it is important that you are as accurate in billing as you want parents to be, so be sure to have a system in place account for these discounts.

Tracking payments manually can be time consuming, and leaves room for error. Child care management software can automatically track billing, while integrating with attendance tracking systems to ensure billed hours are accurate.

Furthermore, statements can automatically be emailed to families to help them track their own finances, while serving as a reminder that their payment is due. The software automatically tracks all transactions and instances of cash leaving and coming into the center, providing center owners with updated reports to ensure the financial needs of the center are being met.

With Procare, child care centers also incorporate automatic billing through Tuition Express. This allows families to pay from their computer or mobile device, or setup recurring payments. This is both convenient for families, and ensures your center is paid on time every time.

Final Thoughts

For child care providers, high quality child care is always the number one priority. However, neglecting the business and financial aspects of your child care business jeopardizes the ability to provide this car one a regular basis. With child care billing software, caregivers can be sure that their billing and accounting are taken care of, allowing them to spend more time with their kids.

Learn more about streamlining the child care billing process here.

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Want more tips on how to run a successful child care business? Check out these related articles.

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Who’s in control, you or the center?

With Procare, there's no need to struggle

Are you working hard to run your center or is your center working you hard?

What I mean is that many directors often tell us about the work they pour into their center every day. But, in the chaos of everything going on around you, ideas of growing your business take a back seat when it’s a struggle to just maintain. We all know that a well-run center requires a lot of time and energy to run smoothly and profitably. That’s where you come in…

Before you arrive in the morning, your day is already booked. Immediately you are busy greeting parents, posting checks, juggling staff, and managing accounting. Before you know it, you’ve skipped lunch or perhaps you’re picking up toys and wiping down counters so you can go home. With time so short, you may even find yourself working when you should be playing. If this sounds familiar, it’s time to look into automating your center with a software solution that as unique as you and your center.

The best child care management system provides an all-in-one solution. It allows you to do away with confusing spreadsheets, generic financial software, clipboards and bank deposits.It helps you easily manage child and family data, attendance tracking, parent communications, staff hours, child/teacher ratios and more. And, it’s all-inclusive with check-in solutions and door security. Once you start collecting tuition electronically, you’ll say goodbye to late payments forever—all with just a few clicks!
Andy Spliethof
VP Creative Services
Procare Software

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Summer is here—there’s no better time!

How much time will you save in your child care center?

lemonadeProcare Software® helps child care professionals across the country save 40+ hours per month of administrative duties they were doing manually. With quicker access to information, point-and-click reporting and built-in processing, Procare helps you easily manage your center and analyze important staff and child information in seconds—giving you the time to develop your business and focus on the children.  

Features include:

  • Succinct tracking of enrollment and schedules
  • Immunization updates
  • Quickly post child tuition fees
  • Automatically collect tuition payments
  • Print/email statements and balance notifications
  • Communicate with parents and employees via messages at check-in, email or text blasts
  • Maintain logs for incident reports and milestones
  • Deposit reports and end-of-year tax statements
  • Roll call and sign in/out sheets, birthday reports, waiting lists, classroom ratios
  • Automated check-in for parents and employees
  • Accurate time card records and calculations
  • Let parents pay at check-in or online
  • And so much more!

The new school year is coming!

With the new school year coming up soon, now is the best opportunity to get going with your new system.. Financing is available to work easily within your budget. Please contact Procare at 800-338-3884 or visit us online.

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Automatic Tuition Collection Becomes Mandatory

TE-CollectionProcare Software, the nation’s leading child care management solution provides an automated tuition collection service called Tuition Express. During our frequent conversations with users and non-users alike, a common theme continues to surface, parents pay late.

The solution to this problem is to make automated tuition collection the only way you collect tuition and fees. With Tuition Express, child care providers make the service mandatory for parents and late payments become a thing of the past.

Automated and integrated tuition collection is easier, safer and more convenient for you and your customers. Today’s parent doesn’t carry a checkbook. They handle all their financial transactions online or set up automatic payments. Additionally, by processing payments automatically—transactions are posted to each parent’s account instantly.

How do you convince parents to accept automated payments?

Some families may be resistant, but directors are simply saying, “Our management software allows us to collect tuition automatically. That gives us more time with the children—and that’s important to all of us!”

Is it affordable and reliable?

Tuition Express is it’s own processor. This means substantial cost savings that we pass on to you with the lowest rates in the industry. We offer rock-solid reliability, handling more than a million transactions each month for nearly 200,000 families across North America.

If you’re currently a Procare user and you’re not using Tuition Express, or if you’re a child care owner or director and would like to learn more, call us at 1-800-338-3884. You can also click here to find more information online.

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Automating Your Child Care Center

Road Sign: Automation Just AheadAs a child care provider, your primary goals are to offer a quality learning experience and loving care to the children at your center. Too often, however, time-consuming administrative tasks can divert your attention from these goals.

By automating the record keeping at your early childhood program or preschool, you can regain time to focus on the children. There are many advantages to automation, including accuracy and efficiency, as well as saving time and money.

When thinking about how to best automate management tasks at your center, you’ll want to consider a number of factors…. Continue reading

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