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FAQs About Preparing Year-End Daycare Invoices (And the Answers)

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.

child care management

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?

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
  • Meals
  • 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

Child care tax forms

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. 

Final Thoughts

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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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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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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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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5 Ways to Simplify Daycare Tuition Collection

It’s no secret that collecting childcare tuition is one of the hardest things you have to do as an owner or director of a childcare center. Parents who pay late always have an excuse. The fact is, they are just paying you last (or not at all) and putting your business—your livelihood—at risk.

By creating policies (and adhering to them) you can avoid a lot of late payment situations. For example, charge a late payment fee and stick to it. To make sure parents know your policies, post them in an obvious place or give them a handout. Be aggressive about collecting on time. If you’re passive, you will have delinquent accounts.

Daycare Tuition Collection Made Easy

Daycare Tuition Payments

For many people who use Procare Software, the issue of daycare tuition collection is a thing of the past. By using Tuition Express, Procare’s tuition collection and payment processing service, centers can eliminate handling paper money or checks. Payments are received 5 different ways (outlined below) and tuition fees are deposited to your account overnight. Parents are automatically emailed receipts and can check their balance online at any time!

Easy Ways for Parents to Pay – And For You to Collect  

  1. Electronic Funds Transfer (EFT) – Weekly or monthly payments transfer from each parent’s bank account directly into yours. Learn more about Electronic Funds Transfers for Childcare.
  2. Recurring Card Payments: Store encrypted parent credit card information to collect tuition payments when they are due.
  3. Card Swipe Processing for Childcare: Parents pay just like at the grocery store by swiping their debit or credit card at a card reader connected to a computer at your front desk (or a staff person may swipe the card for them) and you get the lowest card processing rates in the industry.
  4. Online Payments for Childcare: Parents can pay at their leisure–from work, home or on the go.
  5. Pay at Check-In: Parents see their balance as they check in and simply swipe their card to pay. The  Procare Touch Check-In Computer includes an integrated card reader, or an external USB card reader may be attached to any computer.

Since Tuition Express is fully integrated with Procare, payments and are automatically recorded to each family’s ledger card and deposit reports are created for you.

Final Thoughts

Tuition collection can be a time-consuming and unpleasant task. Tracking down parents to collect checks or remind them of upcoming payments is an inefficient use of time, but is necessary to ensuring regular cash flow at your center. With Tuition Express, payments can be automated—giving parents the flexibility they need, while ensuring your center’s tuition policies are adhered to and payments are received on time. That’s tuition collection made easy.

Learn how to enhance your childcare payment processing with Automated Tuition Collection from Procare.

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