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.
Interested in learning more about tracking your child care expenses? Check out these related blog posts:
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!
VP Creative Services
Cross the Finish Line with Direct Deposit
You know the routine. It’s payday at your preschool or child care business, but it feels like “race day” both for you and your staff. As the owner or director you’re pressing to get payroll checks calculated, while your staff is antsy about hurrying to the bank to deposit their earnings.
Wouldn’t you like to stop racing around and create a win-win situation for everyone? It’s easier than you think! By finding the right tool to streamline the process of doing payroll and handling direct deposit for your employees, you’ll cross the finish line without even running the race. Continue reading
Tired of manually filing W2 forms for your child care business? Well, there’s no reason to print reams of paper W2’s any longer. With Daycare Payroll Software and the W2 Program from Procare Software®, you may now choose to e-file federal W2’s for your child care, daycare or preschool.
Why file electronically?
It’s fast, secure and provides an immediate receipt for proof of filing from the Social Security Administration (SSA). Also, electronic filers have a later filing deadline (the last day of March) vs. the last day of February for all other filers, according to the SSA “How To File” Instructions.
How will it work?
It’s easy. The Procare W2 Program will import your payroll data for the year so you can review it and make any necessary adjustments. Then, with one button click you’ll create an export file that can be uploaded to the SSA Website. You’ll just need to register at the SSA Business Services page and log in to your account to upload the file.
Learn more about ordering Procare W2 / 1099 Software and Tax Table formulas for the New Year – See: W2s Frequent Questions
Until next time, cheers!
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As the clock approaches midnight, we welcome in the New Year with confetti, noise makers, music and good cheer! A year full of hope and possibilities for your child care business to thrive and grow. You may even have a few New Year’s resolutions along these lines. One good resolution is to start the year right with your child care accounting.
For those of you already using Procare Software® we are pleased to introduce a new, free webinar called “Start the Year Right”. In this live, online broadcast, we’ll cover what you need to know when moving from one year to the next. This webinar is intended for people who have been using Procare and have data for the year just ending. If you are brand new to Procare and just getting started, you’ll be more interested in other classes on our Webinar Schedule.
Here’s a preview of what you’ll learn in the Start the Year Right class: Continue reading