However, there are also many conversations with parents that can be uncomfortable and/or challenging. These conversations can be hard to manage and it is important to be as prepared as possible. A lot of the time, the most challenging topic of conversations with parents are involving payments. Money can be a sensitive topic and something that can easily heighten personalities. It is important to empower yourself and your team to know how to address payment-related inquiries in real-time.
New families onboarding
Before a new family joins your center, they will likely come for a live tour of the space. This tour is a common time where the topic of fees will come up. Be sure you are armed with all of the information necessary. Calculate in advance the full fee that would be charged for the child based on their age, days of the week they are attending, any add-ons, etc. Ensure you are clear with listing everything that is included in this fee so that the parent can understand the full value. Do not forget things such as meals, snacks, supplies, transportation, field trips, etc.
Also, be sure to outline whether the parents will be taxed on top of the base fee or not. This differs in many regions and many parents are not aware of these details. Feel free to include any tax breaks or subsidy options that are available to parents to perhaps supplement some of the cost.
Lastly, be sure to outline how and when they will be charged. Is it weekly, monthly, or quarterly? What forms of payment are accepted? The more you can inform the parent upfront the less likely they are to experience confusion or frustration in the future.
Fun fact: 25% of millennial parents have never written a cheque! (2021 childcare service satisfaction report). Consider using an online billing and payments system such as HiMama to ensure your parents experience a seamless, easy-to-use experience! Also, you can avoid chasing parents for payments with all invoices automated through the app.
Late fees
In the world of childcare, it is very common for centers to charge late fees to parents. These can range from a flat rate to an incremental charge for each minute past pickup time. These fees help directors ensure that they will be able to pay their educators that may have to stay past their scheduled shift to care for children whose parents are running late.
Similar to the overall childcare fees, the more upfront, honest, and CONSISTENT you can be with late fees the less uncomfortable circumstances you will find yourself in.
Ensure you have the following in place:
- Inform parents as soon as they join your center what your late fee policies are. Ensure you include exact amounts and how they will be charged.
- If these policies change, ensure you inform all parents right away.
- Ensure you are consistent with these policies. Never make exceptions for one-off circumstances. This sets you up for constant battles with parents over subjective circumstances.
Fee increases
Incremental fee increases are also a common practice in owning and operating a childcare center. Most of the time these are implemented on a yearly bases. When a decision has been made to increase fees, ensure the following:
- Inform all team members and include the communication plan for when and how parents will be notified.
- Let your parents know as early as possible. The more time they have to process this information and prepare/save up, the more satisfied they will be in the long run.
- When you inform your parents, ensure you provide all of the information including exact amounts (this free printable template can help!), the date this will come into effect, and any benefits the parents will see from it (this could be things such as a new management app, increase in educator pay rate, lower ratios, increase in food quality/quantity, new events, equipment, programming, learning materials, etc.).
- Be prepared for the questions that will come up. It would be useful to even prepare an FAQ document in advance and send it to parents along with the initial fee increase announcement. Common questions generally revolve around subsidy, if this impacts them because of *insert subjective situation here* or expressions of frustration and anger.
- Show empathy to parents and hear them out. If a parent needs to vent or express frustration, allow them to do so in a safe and positive space.
Credit card processing fees
If your center is using an online billing and payment system (and I hope you are as it saves hours of weekly admin time!), you will often notice processing fees that are charged for each credit card payment. These fees are small percentages of the total charge that are implemented by the payment processor. In order to keep these fees from affecting your bottom line, most childcare providers will pass them on to their parents. This can be done either directly through the software or by increasing each child’s fee by a few dollars to account for this charge.
If parents notice these charges and have questions about them, be sure to explain them transparently. These are processing fees for ease of use and the simplicity of paying with a credit card. Processing fees are something consumers run into often. Having the convenience to pay large recurring charges on a credit card such as childcare fees benefit parents in many ways. To name a few, they do not have to have the cash liquid in their account at a specific time each month, and they get the reward points!
At the end of the day, working at a childcare center involves being on the frontlines of customer service on a daily basis. You are dealing directly with parents and conversations around payments are bound to come up. The more prepared you can be and the more tools in your toolkit, the easier these conversations will become!
Remember, 75% of parents think that their childcare payment experience could be made easier. To learn more about HiMama’s billing and payments system, book a demo today!
