The best kind of payments are on time, on schedule, and done without worry. But with parent A deciding to write a cashier’s check and another one deciding to pay with a jar of pennies, it can get pretty frustrating. The question remains: what childcare billing method requires the least effort to handle.
The easiest method of handling childcare billing issues is through a third-party online system. A good plan will allow you automatic card/bank drafts and reminders of when they are due. With this system set up, you won’t have to worry about getting families to pay your tuition.
In the rest of this article, we will go through the many options you have to collect payments successfully. We will also dig into how you can make those money collection methods easier on you.
Seven Ways To Simplify Childcare Billing With Your business
Check out these methods for ensuring that your child care center successfully manages tuition payments.
#1: Have Clear Childcare Billing Policies
First, you need to clarify that your parents are on the line when it comes to money. You make this clear by providing them a copy of your policies regarding receiving money. Due dates, methods, and programs need to be upfront.
You can set a good start to this by requiring the person enrolling their child to pay an enrollment fee upfront. The upfront enrollment fee can be part of the first exchange, but it affirms that you won’t accept lateness or deviation from your policies. One aspect of this policy needs to include the next section:
#2: Consider A Late Payment Fee
With upfront tuition rates and an exact schedule, the parent should have no problem understanding the program. Another piece of clarity in your policies comes back to a late payment policy. A clear lateness policy ensures that the parents you are working with understand they need to make it on time.
Make it a percentage of the total overall amount they pay. It is pretty common to select five percent of that total. You will also need to clarify that enough lateness will cause their child to be removed from the program. Check your state to be sure you are compliant with local guidelines.
If you want to explore the idea of leniency, be sure not to make it a habit. Even better is to automate payments with a 3rd party software to avoid late payments entirely. With too much leniency the parent will recognize this and possibly spread it amongst other parents. This decision can cause improper expectations regarding your policy.
#3: Always Be There (As Much As Possible)
Parents who drop their kids off at your daycare may try and skirt around the front desk to avoid you. By being present and reminding them that you require respect, you ensure that they can apply a face to the business requiring payments.
They won’t respect you if they can’t see you. This decision to be visible is also a firm reminder for those who make it a habit of getting late payments. It also gives you an excellent opportunity to start friendly chitchat. Getting to know your parents is a good idea for many reasons.
#4: Be Aware Of Assistance For Low-Income Families
A family that doesn’t make a lot of money will consistently run into issues with payment. It may be related to many problems, and it’s not your business to dig into them. Instead, your goal should be to provide them with resources that can help them make on-time payments.
Come from a place of help with these people, and you may find yourself with a long-term customer. Each state has available resources that can help these families out. By having these resources in mind, you provide a solution for people who struggle.
#5: Choose An Online Daycare Tuition Collection System
The right software combines payroll capabilities with collection abilities. By having your finances managed entirely by the same system, you can rely on a complete resource for all of your finances. Sound online systems will also have the following:
- Transparent pricing
- Automatic receipts production
- An easy-to-read dashboard of information (for you and your parents)
- A short onboarding phase
- A system that waives NSF fees
These features ensure that you can spend more time helping your kids acclimate to their new environment. A system that manages both billing and payroll removes this issue from your hands.
#6: Talk To Both Parents Regarding Childcare Billing
Sometimes people don’t have malicious intent when failing to pay. Instead, the situation may be that they forgot to pay, which is pretty standard. Clients have busy lives, and they sometimes forget upcoming payments.
A third-party payment system will solve this issue, but you can also decide to talk to both parents about the payments. While asking for money isn’t your responsibility (which is why you will bring this up with a small penalty), you need to remind them that you run a business. If the business doesn’t receive payment, you won’t render services.
#7: Avoid Paper Money
The crisp feeling of a dollar bill in your hand is a tactile sensation that can be pretty pleasant. However, having a cash register at your daycare center can be another nuisance. Running to the bank every weekend to get the right amount of dimes and quarters can be painful.
To prevent this issue before it happens, stick to electronic payments. Ensure that your policy makes it clear that they will need a debit or credit card to pay.
If your daycare center feels like a part-time collection agency, you might need some help handling childcare billing. A child care program should not waste its time with this, as it detracts from quality child care. While the simplest way to handle this is through third-party payment systems, some parents will insist on being outside of this.
Should you choose to humor this request (or there’s another reason for you to pursue other options), we hope that this article on receiving child care payments will help you out. For more tips on child care programs, please keep your eyes on our blog.