According to a recent survey by the NDNA, 41% of nurseries expect to make a loss or just break even this year. A further 85% are considering raising their fees in the next 12 months. With the new financial year just beginning, now’s a great time to wipe the slate clean and change the way you do things at your setting for the better. If you’re tired of parents not paying you on time, or not having enough money to pay your bills, there’s plenty of steps you can take right now.
1. Accurate and timely invoicing
The quickest way to tackle the problem of having outstanding fees is to ensure you have a system in place so that parents receive accurate bills on time. Parents querying the amount you have requested will delay payments and cause you extra work. If you use management software; it’ll calculate the cost of sessions as you go, as well as making adjustments for things like Free Entitlement.
2. Email over paper
Paper invoices can be lost or left in children’s bags without getting seen for days – this will cause unnecessary delays in getting paid. It’s a good idea to email invoices where possible; then you’ll have a record of sending them. Emails are also a very convenient way of reaching busy working parents.
3. Always hold a deposit
Nowadays, deposits are commonplace. Think about the deposits you’ve paid when purchasing cars on lease or renting a flat. Once parents have secured a place at a nursery, many childcare providers charge a deposit and this is held on the parent’s account. It is normally refunded when they decide to leave. Only pay a deposit back once the parent has cleared their balance with you.
4. Keep on top of debtors
Nursery management software will produce an aged balance report for you to see who owes you what, and for how long they have owed it to you. This is one of the most important reports you can access to check on the financial health of your business and one you should be checking at least weekly.
5. Use direct debit
It’s so hard to have conversations about late fees with parents, especially when all they want to do is collect their child and get going. If you use automated fee collection, you can collect the full amount from your parents on a set day, every month. Just keep your sessions up to date and have the amount owed ready before collection day. You can take the same amount every month, or change it as necessary.
There’s no doubt that providing great childcare should be the priority of your setting. But taking time to invest in simple software solutions will take away the burden of common financial constraints; allowing you to concentrate on what you do best!
Need a software solution that will help you keep on top of finance?
See what our management software can do for your setting!