child care software
As the end of the year approaches, child care providers have a lot on their minds, including managing enrollment, schedules, and budgeting for the coming year. However, in addition to making these preparations, caregivers are also likely working on distributing daycare invoices for each family they served throughout the year.
Preparing these invoices can be a daunting task, as providers sift through a year’s worth of data and bills to provide an accurate list of each family’s yearly expenses. As they prepare these year-end receipts, child care providers should also be aware of several tax forms that will be required to track their finances.
Addressing FAQs About Year-End Daycare Invoices
To this end, Procare has compiled this list of frequently asked questions surrounding year-end daycare invoices to help providers navigate this complicated process.
Are Daycare Invoices Required?
While child care providers give this information on a weekly or monthly basis as they are paid, they are not required to provide a year-end receipt to parents.
Though year-end receipts are not required, it is still prudent and professional to prepare and distribute invoices for parents.
What Are the Benefits of Daycare Invoices?
While time consuming, creating these invoices will provide a host of benefits down the road.
First, it is courteous to provide this record to parents, as many of the families your center serves may qualify for tax credits in accordance with the 2441 form from the IRS. As parents seek to take advantage of this credit, care providers should be prepared to give them a comprehensive list of services in a timely manner.
Additionally, preparing the year-end receipt will help to ensure that you and the family are on the same page with how much they owe and have been charged. This will be valuable in the event of an audit, allowing your center to clearly demonstrate exactly how much you made, and that your records match how much each family says they paid you.
What Should Be Included in a Daycare Invoice?
When building out your year-end invoice, you will want to include your name and contact information, as well as the name and contact information of the specific family.
You will then want to include a line that describes what each expense accrued by the child was for, as well as the price. This might include:
- Child care tuition
- Special equipment
- Transportation fees
- Late pickup fees
Once all of these charges are accounted for, you will want to include when the parent paid, and how they paid. For example, did they pay by cash or card, etc.? This will make it easy for parents to confirm each charge by consulting payment confirmation emails, or their checkbooks.
Gathering all of this information can be time consuming. It might take some time to locate each monthly receipt. Providers that use Procare’s child care management software can easily print or email year-end statements to parents based on the data stored in the Family Data and Family Accounting modules.
Who Should Receive an Invoice?
The family of each child you cared for throughout the year should receive an invoice. It can be easy to overlook children that only attended a few times, or who left in the middle of the year; however, accounting for this revenue is equally as important to your financial records.
With Procare, providers can send invoices to families with currently enrolled children, as well as those who had children attend at some point during the year.
Extra Year-End Forms to Be Aware Of
In addition to the statements providers send out, there are also some common tax forms associated with year-end that daycare owners should be aware of.
- 2441 Form: Again, this is the form parents must fill out in order to receive child care credits and deductions.
- W10: Parents are required to have this form filled out by caregivers in order to be considered for child care tax deductions. Providers are required to fill out this form if requested by a parent, and must provide their Employer Identification Number (EIN). The W10 form is accessible within Procare Software.
With the end of the year approaching, we hope these answers and tips help child care providers to create organized daycare invoices in an efficient way.
Learn more about how Procare helps providers track invoices and billing here.
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The most important aspect of a child care center is that it be able to foster health and development in a safe environment. That is why before becoming a child care provider, or opening their own daycare center, those in the field of early child care development must undergo rigorous training, log hours of work experience, and attain various certifications. This training ensures that caregivers are prepared in the event of an emergency, in addition to giving them the skills to identify the best course of learning for each child.
As caregivers complete their training, it is important to track who has which certifications and when they must be renewed.
This is crucial for two main reasons. First, state law often requires these certifications. Therefore, for your center’s staff to be legally licensed by the state, they must be up to date on all required trainings. Second, when deciding on which care center to send their children to, parents will often ask about the staff’s level of training and experience. Thus, a more experienced staff will help your center win more business.
Types of Child Care Training
There are two main categories of training and certification that care providers must complete according to Child Care Aware. These are initial training and annual training.
Before starting a daycare center, owners, administrators, and staff have to undergo initial training and coursework in daycare management. This often includes receiving a degree in early or elementary education, as well as a continuing education. These courses teach daycare providers how to build curriculums and handle the business and administrative aspects of running a child care center.
Initial training courses are those that are completed once during a care provider’s career. Though still important, it is generally simpler to track these credentials for each instructor.
Annual training refers to training and certifications that must be renewed on a yearly or biannual basis, as many states require these courses to be taken by care professionals every two years.
This type of training is generally focused on emergency safety and ensuring that child care providers can recognize and monitor developmental or emotional issues.
Emergency Safety Training
Kids will often push their limits without realizing the dangerous consequences associated with their actions. That is why it is important that care providers have up-to-date first aid training and CPR certifications. Required certifications might vary based on the age group your center serves. For example, there is an entirely different set of recommendations when it comes to CPR for infants. These trainings include both indoor and outdoor safety to ensure teachers can create a safe environment for students.
Annual emergency training will also ensure that instructors are prepared to handle natural disasters, such as fires, as well as man-made emergencies.
Child Development Training
In addition to emergency training, care providers must renew certifications that inform them on the development process. This includes the ability to recognize and diagnose cognitive disabilities or areas of physical development that might need more attention. This will also include training to care for children with special needs. Finally, care givers will have to attend trainings that enable them recognize potential cases of child abuse, and teach them the proper protocol to report it.
The most effective way to track the completion of each of these types of training is with child care management solutions.
Using Child Care Management Solutions to Track Trainings
Keeping track of all of these certifications is necessary to ensure the safety of students, and that your center is compliant with state regulations. However, tracking the initial, annual, and continuing courses being pursued by your staff can be difficult to do manually.
With child care management solutions you can track child care training and certifications on an individual level, and set reminders for when they need to be renewed.
Incorporating a software solution at your child care center can ensure that your staff is always up to date on necessary training and certifications – thus creating a safe and healthy learning environment.
To meet state regulations and give parents peace of mind, child care providers must continually learn the most effective methods for teaching and caring for their students. When caring for children each day, it is easy to get busy and lose track of individual training records. With child care management solutions, tracking employee training and setting reminders gives providers more time to engage with and plan activities for their children.
Learn more about how Procare’s child care management solutions help organize employee and family data.
Want to learn more about managing employee time and data? Check out these related posts.
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
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
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
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.
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.
Want more tips on how to run a successful child care business? Check out these related articles.
Child care providers wear many hats. To children they are teachers, caregivers, entertainers, and confidants. To parents they are needed support, trusted helpers, and a resource that can report on their child’s development. To their business and colleagues, they are all of the above and more, as they tackle the day-to-day administrative tasks that go along with running a successful business. Filling all of these roles can be a challenge, which is why many child care providers turn to child care management software to help automate the administrative tasks that take time away from interacting with students and parents.
There are many distinct advantages to incorporating software solutions into your child care business for both staff and parents. Staff can rely on these tools to replace their time consuming, manual methods of bookkeeping, check-in, data collection, and scheduling, as well as to offer a greater level of organization to their hectic day. Parents appreciate the convenience that these tools provide to pay their child care centers easily from their mobile devices, and get daily reports from instructors about their child’s schedule and development.
Software solutions will be especially important as child care programs increasingly cater their services to millennial parents. Currently, 50 percent of millennials are mothers and 71 percent of them work outside the home. Millennial parents have been defined by their use of technology to run their lives and will certainly be looking for programs that can offer mobile-friendly solutions to manage their child’s lives as well. Offering a child care management software at your center is a distinct advantage.
While the benefits of child care management software are clear, what is more difficult to understand is which to select, and which will work best for your business. There are five key considerations that program directors should keep in mind when selecting the best child care management software for their business.
1.) What are your business goals and needs?
To identify which features your solution will need to have, you will have to start off by identifying the pain points at your center. A good way to do this is to talk to staff about which administrative tasks are taking up the most of their time, and where they think automation could most benefit the program. You might also consider speaking with some of the parents to see which features they think would be most helpful. From these conversations, make a list of must-haves and nice-to-haves. This list will start to narrow down possible vendors, and will guide you moving forward.
You will also want to consider who needs to be able to use the software, and where. For example, if your staff needs to be able to update schedules or look up emergency contacts while on the go with students, a solution that does not offer a mobile application will be taken off your list.
2.) What is your budget?
Next to required features, the software price compared to your budget will be the greatest indicator of the solution you will ultimately choose. If you find a solution that satisfies everything on your must-have and nice-to-have list, but well exceeds your budget, it is not a real contender. This will assist in narrowing down your list of potential options. Make sure you request written documentation about any added or recurring costs that might be tacked on to the upfront cost of the software. For example, will there be an additional cost to have regular access to the support team, or to get your staff trained in how to use the software?
You will also want to ask about how their payment options are structured, and if there are any discounts or package deals available. For example, if the child care software provider bases their payment structure in terms of modules, you can purchase the module that addresses your most drastic needs, then add on the nice-to-have feature modules when your budget has grown.
3.) What is it like to use the software?
Once you have narrowed your software search down to a few vendors, you will want to request a demo of the product so you can see its interface and usability first hand. This is an important step to selecting the right product, because you have to make sure that the software you choose will actually be adopted by employees and parents. If the software has the features you need, but has no cohesive user interface, or is just generally confusing, you run the risk of purchasing and implementing a software that your staff does not actually want to use, reverting back to their previous manual methods. During the demo, make sure you can see yourself using the program, and that there is an obvious flow to how it works.
4.) What kind of support is available?
If your business relies on the services provided by your software solution, and something goes wrong, a feature isn’t working, or you have a question on an update, is there someone you can talk to who can resolve your issue in a timely manner? A strong support team is an important feature to look for from a software provider. When talking with the vendor, ask questions about the support available, ask to speak with a support representative, and ask if there is a support site or online resources you can consult.
In addition to learning about the support team, you should also ask about the history of the company. How long have they been providing this service, and where does their knowledge of the child care industry come from?
5.) Talk to existing customers
At this point, you have likely narrowed your list of possible child care management software providers to a few options. One final step before making your decision is to ask to speak with existing customers. Talking with current customers can give you an unbiased view of the providers strengths and weaknesses, and how they would rate their overall experience with the provider. Ask questions about how their implementation went, if any issues arose, or how the product has been received by staff and parents. This can give you a good idea of how the rollout will go at your child care center. Additionally, the customers you speak with might be using the solution in a way you had not thought to, giving you ideas of how to further optimize your investment.
Implementing a child care management software can offer distinct advantages in terms of maximizing your staff’s efficiency and engaging with parents. However, choosing the best software for your child care business can be overwhelming. Following these guidelines can help to streamline your approach to ensure you get the features and usability you need, at a price that fits your budget.
Learn more about comparing child care and daycare software with the software comparison checklist.
Starting your own daycare center can be both exciting and daunting. Many of those who choose to pursue this step in their career do so out of passion for helping children develop and reach their full potential.
While passion and child care experience are musts when opening a daycare, it cannot be overlooked that child care and daycare centers need a solid business plan. Therefore, the opening of your daycare center must be approached with a careful strategy in place to ensure success in the early make or break years. This combination of a clear mission and a carefully constructed business plan will greatly increase the success of your child care business.
At Procare, we want to encourage and enable child care professionals with all of the tools they need to enrich the lives of their students. That is why we have created this outline of important business needs to consider when starting a daycare center. The following information will provide aspiring daycare owners with direction throughout this challenging process.
The “Why” Behind Opening Your Daycare Center
Starting a business, especially one as demanding as child care, is a huge time and financial commitment. It’s a good idea to examine the reasons driving your decision to open a daycare center, or “your big why.” Make sure you have a clear understanding of the time you will be required to devote before and after opening.
You should also consider your previous child care experience. If you have been in this field for years and know it is what you want, then you can move on to the business planning stage. However, if you have relatively little experience in the field, it might be prudent to gain more experience at an independently owned center or even franchise. Think about why you want to open a daycare and the specific attributes that make you uniquely qualified for this filed.
Assessing Your Market
Once you are committed to opening your own daycare center, you will have to do research to determine how competitive a marketplace your community currently is, and how sustainable an environment it will be for your business in the future.
First, are there already daycare centers open in your community? If so, you will want to look at things like:
- What kind of center are they?
- What age groups do they accept?
- Where are they located?
Another good indicator of the need in your community is whether these child care centers have waiting lists. This information can help you determine if there is enough demand in your community to open you center there.
Another research strategy is to look at the current demographics in your neighborhood. If there are a lot of young families or newlyweds, this indicates that there will continue to be a need for your services in the future.
Differentiating Your Daycare Center
Once you are familiar with the current child care landscape in your community, you have to think about how you will differentiate your program to fill a need not currently being addressed.
Look at the hours of operations for the other centers in your community. Perhaps there is a timeframe early in the morning or late in the evening during which these centers are not open. Filling this need could make your center a valuable resource for parents.
Additionally, if there is an age group that is not being served, such as daycare for infants (newborns to a year) or after school programs, your center could establish a foothold by filling these needs.
Bonus Tip: Talk to parents in your community to find out what they need most from a daycare, and aim to address these needs at your center.
Once you have done this initial research into whether your daycare business will be viable in your community, you have to begin compiling a comprehensive business plan that maps out your objectives and the strategies by which you will bring them about.
Child Care Center Business Plan Checklist
Here’s a checklist recapping some essential steps of putting together your child care business plan:
- Competitor matrix
- Financial Planning: Funding and budgeting
- Location of your business
- Staffing needs
- Licensing requirements
- Materials, equipment, and program agenda
Bonus Tip: As you go through creating your business plan, it is a good idea to mark down important deadlines and milestones on a calendar. This will ensure you have an accurate timeline for how long planning and preparations will take, and a strong estimate for when your business will be able to open.
There are many legal regulations to consider when opening your center. License requirements are typically determined by states, and therefore will vary based upon where you live. You will have to make sure your business is in compliance with these regulations by acquiring the proper licenses. Child Care Aware offers a licensing resource that directs you to the proper licensing authorities by state.
It is important to note that child care licenses and business licenses are not the same. You will likely have to acquire separate business licenses and child care licenses to legally operate your business.
Starting a business is financially demanding. For your endeavor to be successful, it is essential that you accurately assess how much it will cost for you to open the center, determine where that money will come from, and then budget and plan to ensure your financial structure will sustain your business as it gets off the ground.
During this process, you should consider initial expenses, and how much it will cost to run your business on an annual and monthly basis. Consider how much you will pay your daycare staff, what your tuition structure will be for parents, how late fees will factor in, and how much property rent / cost is in your community.
Potential Costs of Opening a Daycare Center
A few examples of the costs associated with opening a daycare center are:
- Property renovations
It is important that you don’t begin the business process until you know how it will be paid for. This is money can be accrued from a variety of sources including your personal savings, loans from friends, loans from the bank, government programs, or grants.
It is important that you keep track of your expenses and cash flow for multiple reasons. First, it will help you to track and pay back any loans in accordance with the agreement you made with the lending party.
Second, tracking cash flow ensures that you don’t overspend, or create a payment structure that will jeopardize the financial stability of your business on a month-to-month basis.
To be aware of when money comes into and leaves your center monthly, you should be tracking: the number of tuition payments you get per month, how many times a month your center pays employees, how many enrolled children you are permitted to have, and how many of those slots will be filled.
Bonus Tip: Doing these calculations by hand leaves room for error, so we recommend a child care accounting solution that will track financial information for the center and the families you serve, as well as tracking bookkeeping, tuition payments, and cash flow.
Choosing a Location
The first thing to determine when choosing a location for your daycare center is if you want to run the center from your own home, or in a commercial space. This will affect your expenses and licensing requirements.
The location of your daycare center will be subject to many licensing regulations, including building safety, zoning, physical space requirements, emergency preparedness, and more. Many of these are to ensure that the environment in which you run you center is healthy and secure. This includes things like proper waste removal and having fire alarms.
Two important location licensing requirements to keep in mind are zoning and physical space requirements. Zoning refers to a permit from the proper authority that allows you to run a business, or be zoned for business. The physical space regulation refers to the requirement that child care centers must have 25 square feet available per student. Therefore, you have to keep in mind that the size of your space will determine how many students are allowed to enroll.
For parents to feel comfortable leaving their children at your center and confident that they will get the developmental stimulation they need, you staff has to be well trained and experienced. Additionally, you must have enough instructors to provide quality group and individual care, as well as meet ratio requirements.
When hiring staff for your center there are three key features to keep in mind:
- The student-to-teacher ratio
- Licensing requirements
The student-to-teacher ratio refers to the number of instructors that must be present based on the number of and age of the students. The National Association for the Education of Young Children provides recommended ratios based on age and group sizes.
Staff Licensing Requirements
Professional certification requirements and licenses vary by state; however, child care providers are often expected to have a high school degree or secondary degree. Common certification requirements are the Child Care Professional certification and the Child Development Associate certification. These require a certain number of hours of experience in different child care fields.
You should also make sure that your staff has training in safety courses such as CPR and first aid, as well as how to asses and document child development to report to parents. Child care instructors can provide important information to parents about where their children are developmentally, and where they may need individualized attention. That is why it is important to have reporting and parent engagement processes defined at your center, to simplify communication between caretakers and parents.
Bonus Tip: The interview and review process to find the perfect candidates for your center can be time consuming, so you will want to start the hiring process at least two months prior to the opening of your center.
With financing, licensing, location, and staffing researched and prepared, you are almost ready to open your child care center. Final steps will be getting the necessary equipment and supplies, and setting an agenda for your daycare programs. You will need kid sized tables, furniture, and cots, as well as toys, crafts, and games. You will also need cleaning and administrative supplies.
When setting the agenda for your program you will want to establish routine daycare schedules for each age group. These schedules should incorporate activities that promote early child care development in major areas such as cognitive, emotional, and physical development.
As you get to know your students better, you will be able to cater the activities and learning programs to their specific interests.
The processes and planning that go into starting a daycare center can be overwhelming. However, with a defined mission and strategic business plan in place, it can be a successful and worthwhile endeavor. Following the guidelines above will give you the structure you need to build a thriving daycare center with an environment that fosters healthy, happy kids.
Looking for ways to automate and organize administrative and business functions at your daycare center? Learn how Procare can help!
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