Collecting payments can be a painful or awkward part of the job for Director. No one likes chasing for payment, or constantly reminding parents to pay their fees on time.
Unfortunately, there are no two ways about it and fees have to be paid even if it means having uncomfortable conversations. This article will explore the different ways to collect payment at your center and how to implement an electronic system to automate the process.
How To Collect Tuition and Child Care Payments
Setting Payment Policies
Setting expectations regarding payment is really important before parents enrol in your program. Tuition policies should be covered clearly and thoroughly from the start to avoid any miscommunication.
Be clear and firm on the terms of the different fees at your center:
- Enrollment fees
- Late fees
- Supply fees
- Overtime fees
Repeat, repeat, repeat. Outline the terms of each fee verbally when a family
A good tip is to make fees payable a couple of days before your payroll is scheduled so that you are not chasing for one and scrambling for the other.
Firm and Consistent Communication
Now that you have the policy down, you need to uphold it. We’ve all been there, like when a parent is late on payment and asks for an exception.
This is where being firm comes in. Do not let yourself treat the matter like “it’s no big deal,” especially if it’s a parent that you have a friendly relationship with. The fact is, not getting paid on time is a big deal. It affects your whole business operations.
Be consistent with this and keep emotions out of the picture. Explain things in a calm and professional manner and go back to the Parent Handbook where you’ve outlined the policy from day one.
Don’t Delay
Do not let a parent’s balance get out of hand. This goes back to letting things slide the first time a parent pays late as this will cause a snowball effect. If you have a biweekly payment schedule and a parent misses one by a week, they will have to pay double (plus the late fees!) the next time payment rolls around.
From a cash flow perspective, parents might feel like it is difficult to catch up on payments and this might impact your relationship with them.
If a parent is a day late, be persistent with reminders on Day 2 and Day 3. Be proactive and speak to them in person. It is not easy, but persistence and maintaining your policy will reduce the number of late payments at your center.
Build Relationships with Parents
Now, what if you have that one parents that is a repeat offender? Here’s where relationship building is important. Business is business, but that is not to say that you are cold and heartless.
Create an open and judgement-free environment. Work together with them to understand if they are going through financial struggles. If this is the case, connect them with resources that can help. For example, subsidy assistance or even moving them to a part-time rate if they have relatives that can help with care a couple days in the week could very well solve the payment problem.
Remember that their child’s development in a stable environment is at stake. You can assist families in different ways. Tap into your community at the center and see if other parents are willing to support them with donations or even a fundraiser depending on the situation.
Digital Billing for Child Care
If you’re using a manual system to keep track of payments, things can get overwhelming. Crunching the numbers, keeping track of due dates and chasing for payment can all get out of hand if you don’t have proper systems in place.
The good news is that there is a solution! Using an app like HiMama can help you keep track of everything that’s going on without having to do a lot of manual work.
It’s a great way to become more efficient at keeping track of all payments, calculating additional fees and communicating with parents. This is also good for increasing your focus and decreasing the stress!
What is Electronic Billing?
Automate the Process
Nowadays, any task that is repetitive can be automated. As payments are due at the same time every month, you can set up recurring reminders for your parents that goes straight to their inbox or phone.
Take advantage of being connected through technology. You can also set invoices to be created automatically to reflect your parents’ payment plan. This takes out the work of asking for payments so that you can focus on keeping track of receiving them.
How Does Digital Billing Work?
HiMama’s Billing program allows you to handle your payments however you want. You can:
- Set flexible tuition plans for each age group and schedule
- Create custom invoices to include additional fees
- Send invoices directly to your parents’ devices
- Automate the invoice creation using SMART billing (never manually create an invoice again!)
- Pull up important information like revenue, taxes and invoice reports
- Track billing activities at a glance
Whether you are a center with multiple programs or an in-home provider, this is an extremely useful tool to get organized.
Set Up Tuition Plans
The first step to implementing billing program is defining your tuition plans. There are three ways to do this:
SMART Plan
This plan sets the rate for each age group. Once that is done, all you need to do is set up your child’s profile. As the child graduates from the Infant room to the Toddler room, parents will be billed accordingly.
Group Plans
This is beneficial for programs that don’t have a tiered fee structure by age group. This is great for families with siblings and useful if you have families receiving subsidies or a special rate.
Individual Plan
If a child does not fit into either of these, you have the option to create a custom plan just for them. For example, if you have one-off drop-in students.
Automatic Invoices
Now that the plans are set, invoice timing and billing cycle are the two key components to automating this process.
Invoice Timing
You have two options for timing:
- Pre-paid – at the start of each billing period
- Post-paid – at the end of each billing period
Billing Cycle
This is how often the payment cycle is. You can customize this, or choose from:
- Weekly – Every Monday
- Bi-monthly – 1st and 15th of each month
- Monthly – Once a month either on the 1st or 15th
All you need to do now is add in the appropriate tax percentage and select the plan that the child is on and you are done automating your billing.
Electronic Payments for Child Care
Why stop at billing your parents when you can receive the payments automatically too? This is the real game changer.
As online payments are becoming more standardized, it is now possible to make paying fees a convenient process for parents. It’s as simple as setting up an account with a preferred payment method and parents can pay through the app.
This minimizes the back and forth as parents can do it from the comfort of their homes. The auto-payment option makes the transaction simple, straightforward and stress-free.
Benefit of Electronic Billing and Payments
Technology might seem difficult, but automating your billing and payments process can free up your valuable time, save money on printing paper and make documents easy to find. Not only is this the case for you as an admin, but also for your parents. Increasing the ease for parents to submit their payments also eliminates the risk of them forgetting.
Coupled with a clear payment policy and communication, taking the step to go digital can help you free up time and resources to focus on other areas of your business. What do you use for billing and payments? Would you consider going digital?
Fill out the form below to learn more about how HiMama can help you with your tuition!
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- Complete Guide to Billing & Payments for Child Care Centers
- Advantages of Online Childcare Invoices
- How to Chase Payments at Your Child Care Center
- The Pros & Cons of Different Payment Methods for Child Care Centers
