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
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.
Being a child care director is both a challenging and exceptionally rewarding job. The nuances of combining physical care and education in a nurturing environment requires a special person, because there is so much to do.
More than providing high quality care for each child, building curriculum and working together with parents to ensure development, you are also running a business. This means taking care of time consuming administrative tasks to ensure the continued success of your center, such as collecting tuition, calculating payroll, managing supplies, and more.
Of course, there are also state licensing requirements that must be addressed to ensure your child care business complies with legal standards. These include attendance and meal tracking, monitoring employee training and certifications, and assuring that proper teacher-student ratios are met.
Child Care Management Checklist
Here we have created a mini-checklist to guide you through the many management tasks in your center, as well as solutions to help streamline the process.
While receiving just one payment might seem like a small thing, accepting the check, writing a receipt and recording it in a ledger or spreadsheet can be a 5 minute task. Easy, right? If you have 60 families and you’re handing payments this way twice a month, you could be spending up to 10 hours on managing payments alone. That is once you have tracked each payment down. Parents are busy and can often forget when their next payment is due, leaving child care providers to track them down at check-in time or the end of the day.
Procare’s Tuition Express® gives you easy options to process all payments at once or let parents pay at check-in and online. Since it’s fully integrated with Procare, each payment is automatically posted to the the family’s ledger.
Maintain Room Ratios
Juggling teachers, aides and children between rooms is an all-day, everyday chore. If one teacher goes on a break, you could go over your limit. In addition to licensing requirements for each age group that dictate a certain number of staff members must be present per child, ratios can also affect your finances. Having too many teachers staffed on a day when there are fewer students means you are spending money unnecessarily. That is why an accurate view of how many children are in your care on a daily basis is necessary.
Procare’s dashboard offers you at-a-glance classroom counts and shows any that may be understaffed.
You know the drill—climbing a mountain of paperwork each month to compile your meal reports. If you’re participating in the CACFP and you’re not using Procare’s Meal Tracker to handle meal counts and help with reporting, you’re working too hard.
Laugh at Your Bottom Line
Weekly and monthly financial tracking by itself, is a full-time job. If you don’t have a bookkeeper on staff, you know that tracking, reporting, and reconciling takes time. Procare’s Expenses and Ledger module handles these tasks and more… tracking expenses, generating overall financial reports, and helping you manage your budget all year long.
Child care management is a dynamic job that requires interpersonal skills as well as business acumen. With this checklist, child care professionals can ensure they are maintaining their business, while saving time.
Learn how Procare helps child care providers complete administrative tasks everyday.
Interested in learning more about saving time at your child care business? Check out these related articles:
“Is there a way for parents who currently pay by Tuition Express to look at their account history online?”
The answer, of course, is yes. We’ll get to the details in a moment.
For those of you who may not know about Tuition Express yet, it’s an innovative payment processing service that works with ProCare Family Data & Accounting to automatically collect tuition and other payments for child care centers, daycares and preschools. Fees may be electronically deducted from parent bank accounts or charged to a credit card. Either way you get paid on time, every time. And, it’s extremely secure as ProCare Achieved Level One PCI Security status.
Now, to the part about how parents (and center owners / directors) can view their payment history online. Continue reading
The following question recently appeared in the ProCare Tech Support “IN” box.
- Up to 3 Hours/Day $21 (level 1)
- Up to 4 Hours/Day $25 (level 2)
- Up to 5 Hours/Day $29 (level 3)
- Up to 6 Hours/Day $33 (level 4)
- Daily MAX $35 (level 5)
Please let me know how we can enter this to be billed according to the days they are scheduled in advance.”
You can absolutely do this kind of stepped rate billing in ProCare. In fact, one of our standard billing formulas fits this case perfectly.