3 ways a childcare billing software will help you stay on top of your finances

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.

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Is invoicing at your childcare center taking up more time in your day than you would like?

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. 

1. Automatic & batch invoicing
2. Digital & automatic payments
3. Easy-to-understand, automated financial reports & revenue forecasting

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Automatic & batch invoicing

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.

• No matter what your payment calendar looks like (monthly, bi-weekly, weekly, etc.), the software will automatically send the invoices to each family. 
• Since it uses each child’s attendance data that is tracked digitally in the same childcare management software, every invoice for each family will be accurate.
• No more sending each invoice one-by-one. You can send all simultaneously at the click of a button, and still, each family will receive the right invoice.

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Digital & automatic payments

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:

• If the childcare software has an app for parents and families, they will get an automatic notification when they have received a new invoice.‍
• Families can pay through the app, or online. Say goodbye to waiting for parents to bring their checks, then waiting some more for the check deposits to clear at the bank. With just a few clicks, they can make their payments digitally.
• Some billing software also lets parents set up automatic payments. This means that whenever there is a new bill, it will be automatically paid. This is helpful for families who know they are easily distracted or busy and usually forget to pay on time.
• If a parent doesn’t want to sign up for automated payments and misses a deadline, an app can send a polite reminder without you having to do a thing. 
• Some billing softwares also automatically charge families for add-ons and additional services, like ad-hoc sessions and meal plans. No more manually updating and creating one-off invoices on your end.

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Easy-to-understand & automated financial reports so you can maximize your revenue

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: 

• All financial information is in one place, which means in just a couple of clicks, data can be turned into a clear and understandable finance report. 
• Since information is collected and stored over time, you can use historical data to more accurately forecast your revenue.
• The right childcare billing software can create a target budget for you based on your center’s data, and can calculate an appropriate cost per child for you, to help determine appropriate tuition fees and increase revenue.
• You can also be notified when enrollment drops below your desired amount, and in which classroom you have openings, so you can act quickly to address it (and easily see who is first on your digital waitlist, which is mentioned below).
• Easily see which days are continuously slower, so you can provide ad hoc sessions for extra fees, and maximize your occupancy and revenue using full time equivalent (FTE) attendance.
• Some softwares can actually generate the documentation needed to reconcile further support from government and philanthropic sources on behalf of children eligible for financial assistance or funded hours.
• A great childcare billing software can also create a digital waitlist, so you can store prospective families’ information and easily keep track of their status right on the platform. You can even log deposits for each registered child, and mark whether it has been paid or when the return is made.
• Payment processing fees
• Some softwares have next day payout features so you can see your revenue even faster
• Automatic payment reminders, so parents and carers will be notified when a payment is due, and also when a payment is overdue or outstanding, so you no longer have to try to track them down.

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.