4 ways to effectively manage your daycare's billing.

In order to succeed at running your daycare business, it goes without saying that your priority should be the safety and enrichment of the children you serve. However, it is also very important that you attend to the behind-the-scenes aspects of managing your center. Perhaps the most vital back-office aspect of your business has to do with the systems you have in place to ensure that you are paid fully and on time. Below are tried-and-true tips that will optimize this crucial component.

1. Review your current billing policies.

It is essential that parents know exactly how much your services cost as well as all other financial expectations with which they will need to comply. Lay it out clearly and concisely in a policy statement that is given to everyone in their enrollment package and is available on your website or as a paper copy upon request. Enforce your policies equally across the board, with no favors or special treatment for anyone under any circumstances.

2. Keep ongoing track of payments.

Don’t think for a second that you can rely on your memory to retrieve details about which parents have paid and how much or who still owes you money for services rendered. By the same token, it’s a mistake to assume that you will have the time and bandwidth to make sense of piles of receipts thrown into a file cabinet. If you want to excel, you really need payment and invoicing software.

An electronic system takes the guesswork away. Of course, it is your job to ensure that the details about each month’s services are accurately entered into the system. This becomes particularly important if there were any changes or departures from the norm. As soon as a parent submits their payment online or at your facility, the software will generate a receipt and record every detail. Consequently, there is transparency and accountability for all parties.

3. Give parents multiple payment choices.

The bottom line is that your center cannot function without regular infusions of cash from the parents who place their children in your care. The more you do to make resolving their bill fast and easy, the likelier it is that you will get your dollars on time.

To that end, take some time to find out how people want to pay, and then offer it as an option. In addition to cash, checks, and credit card payments on-site, you should also consider talking to your merchant account provider about furnishing the following choices.

• Online from your website.
• Mobile through your center’s native app.
• Bank transfer or eCheck directly from the customer’s account.
• Recurring payments.

The more you can incentivize people to pay electronically, the better it will be for your administrators. Additionally, speaking to parents about the benefits of recurring payments is a great way to nudge them in the direction of signing on to have a specific amount withdrawn from their bank account or credit card on a set date.

4. Develop a strategy for late payments.

Tending to the needs of your little charges from morning until evening keeps you and your staff busy, and parents are equally occupied with work and numerous other responsibilities. As a result of the procrastination, distraction, and downright forgetting that occurs for these busy people, delinquent payments are a fact of life. Nevertheless, you need to come up with ways to minimize their frequency and resolve them efficiently and with grace.

Begin by using your daycare payments and invoicing software to create a report that shows a snapshot of your current landscape. Who has paid? Who owes you money and how much? What bills will soon be coming due? For this final category, you can then figure out when to send a gentle reminder that will go a long way toward getting the money to you on time.

Having this knowledge in advance also gives you leeway in how you address the situation. For instance, you might send an additional reminder or offer the option of a partial payment now with the remainder due at a specific time in the future. Additionally, this is a perfect opportunity to re-state your late payments policy. This serves as a reminder and gives clients time to avoid the penalty.

When your payments infrastructure is uniform, transparent, and efficient, everyone wins. You are much more likely to get paid in full and on time; parents will understand what is expected of them and will have choice and flexibility. As a result, you and your staff will be happier, a mood that will trickle down to the children and ultimately lead to a more peaceful, fun, and happy center.