Whether you run a childcare business that’s a small, in-home daycare or a multi-location franchise, you and your employees deserve to get paid on time. It all comes down to one thing: parent billing.
Regardless of the size, location, or type of childcare center you operate, making sure parents pay on time involves the same strategies. Curious about how you can make billing easier for your entire business? Keep reading to learn how to optimize your payment processes.
5 Ways to Collect Childcare Center Payments
Whether you prefer online options or in-person payments, set up a payment process that aligns with your childcare billing schedule.
There are five main ways that childcare providers collect payments today. You may want to welcome all types of payment or encourage digital payments for ease in your business.
Cash is an easy way for some parents to pay for childcare. However, it’s not the most ideal option for your business. With cash payments, you must visit the bank to deposit the bills, which takes extra time and organization. Ultimately, cash is a valid form of payment but encourage parents to choose electronic options for convenience.
Paper checks are typical methods of payment within childcare centers. Checks can be mailed or dropped off by parents in person when they see your childcare director. As with cash, handling checks requires a lot more organization and responsibility. Once you receive payment, it’s your job to make sure it gets to the bank on time and then wait for the funds to clear.
3. Debit/Credit Cards
Credit and debit cards are the preferred form of payment for many busy parents. 80% of adults prefer using cards over cash for financial transactions today. It’s easy for parents to pay with a card on-site while they’re picking up or dropping off their child. Plus, it quickly transfers funds to your business. Parents can also use cards for one-time or automated payments online.
Autopay is a great option for parents who want to ensure instant childcare bills get paid at the beginning of every billing cycle. They simply set up their payment details once and the bill processes automatically upon the due date.
5. ACH Transfer
ACH bank transfer is another instant option for payment. Parents don’t have to opt-in for autopay with this option, but it allows payments to be completed in full. There’s less of a wait time for childcare businesses to receive funds since payments are usually transferred within hours or days.
Using Online Parent Billing and Payment Software
Whether you collect all five methods of childcare payment or you want to prioritize online automation, using a parent billing software makes the process more effective and organized. If you want to accept any type of payment, anytime, anywhere, turn to a platform like Daily Connect. You can receive payments in person, over the phone, or even through mobile devices.
How to Handle Late Payments
Late payments are a common occurrence in the childcare industry. Parents are busy and every family has different financial circumstances, so a few late payments are expected.
However, if late payments are a constant struggle at your childcare center, there are a few things you can do to encourage parents to pay on time.
Most importantly, remember: having a billing software that keeps track of invoices, due dates, how much a parent owes, and late fees relieves you of constantly having to chase late payments. In the meantime, here are some ways to promote fewer late bills.
Update Childcare Center Policies
Parents have to agree to your childcare center’s policies before they can receive childcare. Make sure your parent handbook and policies clearly explain tuition due dates, payment methods, late fees, and other charges. Agreeing to these standards of late fees and other consequences, parents are more likely to pay on time.
Set Up Automated Billing Reminders
If your email list is integrated with a parent billing app or childcare software, schedule automatic billing reminders for all families in your class. You can also create automatic reminders as app notifications or text messages so parents don’t forget the bill is due soon.
Send Due Date and Late Payment Notices
You can also set up automated emails to deliver urgent notices regarding childcare tuition. Instantly send invoices via email and automate follow-up reminders for deadlines and late payments. For example:
- Send email reminders for unpaid invoices on the payment due date
- Send email notices for day-late payments
- Send email warnings for payments and late fees that are 3 or more days overdue
With most childcare billing software, you can customize these automated reminders to suit your billing cycles.
Confronting Parents Who Repeatedly Pay Late
At every childcare business, there are a few families who constantly miss or avoid payments. Part of running a successful childcare center is knowing how to confront these customers with kindness while remaining firm on your pricing model.
If you need to have a difficult conversation with parents, remember to stay polite even in this frustrating situation. You can direct them to local or state resources for childcare financial relief, but in the end, it’s up to the parents to cover childcare. Explain that you want the best for their child, but that it takes a lot of resources to operate a busy childcare business.
Your business is not a charity, and unfortunately — as stated in your tuition agreement and customer policies — termination of childcare services will occur if costs remain unpaid.
Easily Collect and Manage Childcare Payments
As a childcare provider, you have an overwhelming amount of daily tasks to complete. You deserve to focus on what matters most in your business: the children.
Instead of spending valuable time and energy trying to get paid every month, upgrade your parent billing and payment systems to work for you. With comprehensive childcare software, you can automate invoices, send instant email reminders, and collect secure daycare payments every time.
Our leading childcare management app, Daily Connect, integrates parent billing features while streamlining every other aspect of your childcare business. Get a free trial today to try it out for yourself!