You’re in the business of caring for children because it’s your passion. And for many childcare owners, that means you’d rather not talk money with parents or worry about the accounting side of things. But the reality is child care billing is one of the essential functions of any center owner.
Confidence in billing and charging customers is something that does come with time and experience. But processes and tools can help you get to this point faster and with greater ease.
If you’re starting out or are reviewing your rates for the upcoming school year, this guide to setting rates and billing customers is suitable for you.
Setting Child Care Billing Rates
Childcare rates take into account a variety of aspects related to the care and education you provide students. To set your childcare billing rates, you need to evaluate several aspects of your childcare center.
- Review Your Center’s Expenses
Here’s a look at some of the factors that could impact your rates based on the cost of doing business.
- Snacks offered
- Meals offered
- Classroom toys
- Art and craft supplies required
- Activities planned
- Rent or mortgage payment for building
- Utility bills
- Special programming costs, including guest speakers or visitors, such as the local zoo or fire station
- Payroll
- Technology
With inflation where it is, you’ll need to review how these expenses have changed over the last six months to a year. It’s probably time to raise your rates to avoid losses due to increased expenses.
- Decide What Attendance Options to Offer
You have many options when it comes to attendance options. Some childcare centers offer hourly rates with drop-in options. Others have a flat daily rate and allow parents to sign up for 1-5 days a week. Some centers only open full-time schedules with one billing option because they don’t want the headache of managing other care arrangements and attendance tracking.
With the right childcare software, billing for various attendance options is simple. The unique needs of different billing types for each child should not keep you from opening these options. It’s all about getting the best childcare app for the job.
- Decide How Often to Bill Customers
Most childcare centers bill once a week and draw tuition payments in advance. So on Monday, you’re billing for the upcoming week to ensure you have the means necessary to cover your expenses and avoid late payments.
If you offer hourly care, you might bill daily. And other centers that only offer full-time schedules bill on the first business day of the month for the entire month’s tuition.
Think about how various billing methods could impact cash flow for your clients and do what’s best based on your parent population.
- Complete Market Research for Your Area
Finally, review the market once you arrive at some general rates based on expenses and the types of attendance to offer. See what other centers in your area are charging to see how you align with the market.
You likely don’t want to be the lowest cost option, but you also don’t want to price yourself out of the market at far higher rates than your top competitors. Think about how you’ll position yourself in the market based on price and curriculum or program offerings.
- Review Discounts and Promotions
It would be best to decide whether you’ll offer discounts, such as a sibling discount for parents with multiple children enrolled at your center.
Consider how special promotions might attract new parents, such as first week free or free one-day attendance to get a feel for the school. Just make sure you still have all necessary waivers and medical permissions in place if something happens during those days.
How to Bill Parents with Confidence
Now comes the part where you need to put processes to bill your clients. Setting rates is not easy, but billing customers without the right tools will certainly present unique challenges.
You need the best childcare billing software to know that you’re collecting payments on time and giving parents the payment options. Remind parents to make payments and give them options for paying by ACH or credit card to set up automated payments.
Parents don’t want the headaches of going in to pay their bills each week or carrying a check with them to make a payment. A parent portal through your childcare app will allow them to manage their tuition payments and payment methods easily.
And you can automate billing for additional fees, such as field trips or overage charges for late pickups. When you tie your attendance software with your billing tools, you’ll have the means to automate the process from start to finish.
iCare Software is one of the most flexible and easy-to-use childcare apps on the market. You can offer various attendance options while automating tuition billing to save many hours each week and know that you won’t have any bad debt from overdue payments. Schedule a free demo to learn more about the robust software and parent app that helps you retain customers and manage your business with ease.