Save Time at Your Daycare: Trade Cheques for Daycare Billing Software

These days, the vast majority of businesses do their best to avoid cheque payments. After all, when was the last time you paid by cheque as a consumer? Despite this trend, though, many child care businesses continue to receive cheque payments from most of their clients. When asked why, daycare supervisors tend to respond one of two ways:

1) This is how we’ve always done it. What other way is there? I’m too busy to worry about changing our billing process.


2) If we tried to accept credit cards or bank transfers, it would result in a bunch of extra reconciliation work. In the end, we wouldn’t save any time or money.

So, while most child care managers are aware that cheques aren’t ideal for them or their customers (who generally aren’t happy with the situation either), they don’t see how it’d be practical to switch to another system.

As it turns out, accepting cheques is even more detrimental for your business than you might think. And, making the switch to digital payments isn’t all that difficult. In fact, simply eliminating cheque payments can do wonders for your profitability and efficiency, so long as it’s done alongside the adoption of a daycare billing software.

First, let’s take a look at exactly what goes into accepting cheque payments. From there, we can explore easier, cheaper, faster alternatives.

Step 1: Get cheques from parents

One of the biggest problems with cheques is simply getting them in the first place. They’re rarely used in daily life, and many families don’t have cheques on hand when they come to your daycare center. This creates the need for payment follow up, which can cause major cash flow problems. On top of this, following up on payments can be a huge time sink. And, since most daycares are operating on a month to month basis, it’s often impractical (not to mention potentially off-putting to parents) to request post-dated cheques in advance.

While some daycare billing software can automate the process of payment reminders, the problem of physically receiving cheques still exists regardless.

Step 2: Fill out deposit slips

Before taking cheques to the bank, most child care supervisors will take the time to go through their list of families and ensure that each of them has submitted payment for the month. As part of this accounting, they’ll generally fill out deposit slips manually, either by hand or as part of their daycare bookkeeping software. Either way, doing so takes a considerable amount of time.

Step 3: Go to the bank

You’ve now spent several hours collecting cheques from parents, filling out deposit slips, and double checking to ensure that every family has submitted their monthly payment. Now you’ve got most (usually not all) of your cheques in hand, and you can head to the bank.

On your way to the bank, you might be thinking: is there going to be a line? Will all of these cheques actually clear? Will I need to follow up with certain families because of bounced payments or illegible handwriting?

We’ve talked to a lot of daycare managers, and most of them tell us the same thing: while they’d like to only go to the bank once per month to deposit cheques, they end up making at least 2 or 3 trips each month in order to deposit cheques that they receive sporadically. It’s impractical to go to the bank every other day, too, which means that late or poorly timed payments from parents may sit around for a week or more before being deposited. This is far from ideal when it comes to cash flow, not to mention time management. It can also be frustrating for parents, who must keep an eye on their checking accounts to watch for when a cheque finally clears and ensure that they have sufficient funds.

Step 4: Reconcile payments

Unless you’re issuing receipts to parents (if you don’t, you’re not alone), this may be the last step in the cheque process.

At this point, you have to ensure that all of the cheques have actually cleared the bank. From there, you’ll need to reconcile that cash flow into your deposit book, or to the invoices in your daycare accounting software. While a daycare billing software solution will certainly help you keep track of all your outstanding invoices, the process of manually entering cheque payments will still take a toll on your effiency. And, if you have a bookkeeper, you may need to involve them in this step as well, which will increase costs.

Daycare billing: Is there a better way?

You may have only spent 5 minutes reading this article, but consider how much time goes into completing all of the steps in this process. It can add up to many hours per week, and in some cases hundreds of hours per year. Combined with the cash flow issues and the hassle that many parents perceive cheques to be, are cheques really worth it? Isn’t there a better way?

Ultimately, that decision will be up to you and your daycare center. It’s worth considering a recent report by Deloitte, though. As a leading professional services firm, Deloitte found that schools (which face payment challenges similar to daycares) could save more than 2,000 hours per year, per school by switching from cheques to electronic payments. Do the math and consider how much you could save in both time and money by eliminating cheques.

Making the switch from cheques to electronic payments doesn’t have to be a hassle. If you are interested but are not sure where to begin, make sure to drop us a line.

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