Earlier this month, a story broke in the media about the owner of a nursery in Lancashire who used Facebook to rant about how some parents who use her setting are living a life of luxury, whilst claiming they are too poor to pay for childcare. Jessica Webber revealed how her business, the Toddle In Private Day Nursery, had been crippled by £10,000 worth of debt due to these unpaid fees.
Many childcare providers face similarly testing circumstances when it comes to getting parents to pay up for the service they provide.
Now, there are bound to be some parents who come up against problems paying their childcare fees from time to time because they’re facing genuine financial difficulty. But Ms Webber was shaming those parents who she knew – from checking social media – were splashing out on holidays and other luxuries whilst knowingly racking up unpaid childcare fees.
So, how can you ensure parents pay consistently at your own setting? There are no guarantees, but here are a few tips to help you foster a culture of paying on time:
- Ask parents to sign a ‘Payment of Fees’ policy when they register their child at your setting, which outlines their agreement to pay you on time
- Ask for childcare fees in advance (ideally a month) to give you time to address any late payments
- Use an accurate and effective invoicing system
- Give parents a copy of your policy outlining the consequences of non-payment of fees
- Use automated fee collection to collect payments
- Ask parents to let you know as soon as possible if they come up against unexpected financial difficulty which may impact upon their ability to pay their fees. For one-off cases, this could open up a conversation about putting together a payment plan
- Use nursery management software to run regular and detailed reports about your business. This will give you a good idea of your financial position, including the amount of aged debt you have
- Address late payments immediately, with a reminder letter. If this has no effect, you may wish to instruct an organisation like Thomas Higgins to send out a Letter Before Action which sets out a final deadline for payment before further action is taken to recover the debt.
Most parents wouldn’t dream of postponing their payment for other amenities they’ve used, such as their mobile phone or broadband service. So, why should childcare providers be treated any differently? Use the tips we outline in this article today, and please share some of your own experiences of how your setting manages late payments in the comments below!