Before I begin, please note:
Billing features are often already a part of a childcare management software (a good one worth using, at least!).
Throughout this article, I will be using the terms childcare management software and childcare billing software interchangeably, since - I may be biased but - I think you should definitely look for a software that can do everything all in one place anyway.
Those who don’t work in early childhood education (ECE) probably underestimate all the finances a childcare director or owner has to manage. It is not as simple as teacher’s wages, and collecting tuition and fees, but actually, it is quite a bit more than that - to say the least.
Managing finances in early childhood education includes many expenses, including learning materials, meals, outdoor equipment and other required maintenance checks, marketing and advertising, licensing and compliance, staff development and training, and operating expenses like rent or mortgage and utilities, and more.
That’s why I would not be surprised if you told me you are overwhelmed by the number of spreadsheets, paperwork, and numbers that you have to manually manage and track. Or, get stressed out by budget planning and revenue forecasting.
I don’t blame you, I would be too!
Managing your finances is likely a big factor in your day-to-day stress. It's a big-picture problem to be fixed, and it won't happen overnight. But, a great place to start is with a childcare billing software. It can provide you with billing and invoicing tools that will relieve a lot of the day-to-day stress.
Let me break it down for you by explaining 3 ways a childcare billing software can improve your billing efficiency and accuracy.
How long does it take you to send out each invoice separately to every single family? How many times do you have to double check that the family is getting invoiced the correct amount? DId you track attendance correctly for each child - half-days, full-days, ad-hoc days, meal plans, sick days, holidays, etc.?
It is not as simple as sending out the same invoice with the same amount every week or month.
By using a childcare management software, your billing efficiency will drastically improve with tools like automatic invoicing and batch invoicing.
In order to manage finances, budget and forecast your revenue, you rely on bills and tuition fees being paid on time.
So when parents don’t pay on time, it is not only frustrating, but also can impact your overall finances and budgeting, especially for small businesses where cash flows might be more limited. For example, were you planning on buying more supplies for a classroom, but since 6 families missed their bills due date, that now has to be delayed?
Invoicing in childcare settings - keeping track of every individual payment from each parent, matching invoices to all of them, and staying on top of past due tuition - is tedious and time consuming.
With a childcare billing software, families are more likely to pay on time because:
At the core of any high quality childcare is a sustainable business model and an appropriate, up-to-date budget.
When your childcare billing software automatically generates clear financial reports, it also means that you can better understand how to maximize your revenue.
A large part of a childcare center’s revenue comes from the children’s tuition and fee payments, so making sure your occupancy is as high as possible is critical. This isn’t as easy to do as it might sound, as it is not as simple as increasing your headcount.
You need to stay on top of attendance for each classroom every day, track half-day versus full-day attendance, watch for children aging out of the program or switching classrooms, and make sure ratios are correct and correlate with changes in staff. On top of that, you need to clearly see where you have openings for new children. That’s where a childcare management software’s reporting comes in handy.
With software’s reporting, you can clearly see where you currently, and will have, availability to enroll more children, which as a result, means you will be optimizing your occupancy and boosting revenue.
But, tuition fees is not the only reports you need. You also have to be able to compile all financial information into reports to have a clear overview of your finances, so that you can budget and continue a successful childcare business.
How much are you getting from tuition each month? How much are you spending? Do you have enough to get new school supplies? What if the play structure outside suddenly needs urgent maintenance? Do you have enough to cover expenses that are not predicted?
With a childcare billing software:
By using automated reports generated by the childcare billing software, you can optimize your occupancy, which will increase your revenue - It’s a win-win-win!
Also! Some childcare billing softwares can save you and your staff time by being more efficient for the parents and families. For example, families can generate their own tax statements when they need to, so you don’t have to do a thing.
Please note: here at Famly we love sharing creative activities for you to try with the children at your setting, but you know them best. Take the time to consider adaptions you might need to make so these activities are accessible and developmentally appropriate for the children you work with. Just as you ordinarily would, conduct risk assessments for your children and your setting before undertaking new activities, and ensure you and your staff are following your own health and safety guidelines.
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