How to address unpaid childcare fees

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For all other service contracts that parents have – from their mobile phone bill to their gym membership – they know not to default on their payments. So why is their attitude to paying for childcare sometimes so different?

The truth is – many childcare business owners tolerate late payments from parents, fail to chase up late fees more promptly, or do not enforce the consequences when they should. To add to this headache, nurseries and other childcare providers face a constant battle to balance their costs against the squeeze of free entitlement. So, getting paid on time is critical to running a successful childcare business.

But what can you do to help yourself get payment promptly?

1. Set it out in black and white

As soon as a parent registers their child, you should give them a breakdown of what you charge, when you expect payment by, and the consequences of any non payment in writing. By making it clear to them what you expect from the very outset, you can avoid excuses like “I didn’t realise I need to pay my fees every fortnight”.

2. Have a chat at the first sign of trouble

Whatever the circumstances, and no matter how many years a parent has used your service –  you should always address any payment problems as early as possible. Although it may be tricky to isolate parents,  ask to have a chat privately to find out what the issue is and then agree a plan of action to resolve it.

3. Do away with hand written notes 

If you give parents a hand written piece of paper detailing how much they owe, this gives the wrong impression about your childcare setting. It makes you seem less professional than you are. Will a parent take a hand written note seriously? Probably not. On top of this, they can easily lose or misplace a slip of paper.

4. Chase late payments as soon as possible

You may be tempted to let a late payment slide for awhile – after all, you have a million and one things to juggle with running the nursery, and that parent is bound to realise their mistake at some point soon. All well and good, but if you give some people an inch they may take a mile. Stay focused on the fact that you are running a business, and people depend on you to pay their wages.

5. Take preventative measures

You can avoid the pain of chasing late fees completely by investing in software such as Abacus, which invoices parents electronically. Nursery management software like this will allow you to run reports instantly to see who has paid you, and who has outstanding fees.

In addition, using software like Fee Planner means that childcare fees are taken from parents’ bank accounts by direct debit – which guarantees that you will always be paid on time and those awkward conversations you used to have with parents will be a thing of the past!

If all else fails…

Sometimes, no matter how many discussions you have and however hard you try,  there may be some parents who leave your setting owing you money. So what do you do if this happens?

A simple solution would be to use a debt recovery service like Thomas Higgins and Co.  You simply register on their website and use it to send out a series of legal letters; you can even take the parent to court if the situation escalates.


Take action today to get your finances in order, so your setting can thrive! 

Find out how management software can transform the service you provide:

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