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

On paper, running a childcare center might seem pretty straightforward from a financial standpoint.

Parents enroll their children at your setting, and pay you for the care you provide their children. Right? 

Well, as we all know, there is a little more to handling your center's finances than that, and it can be hard to fully focus on the children or keep up with their parents, when all the moving pieces aren't in exactly the right places. Managing your money can be a big source of stress. It's a big-picture problem to be fixed, and it won't happen overnight. But in the here and now, digital tools like early childhood platforms can provide some useful resources to relieve some of the pressure.

In this story, we'll look at three key ways that software can help you:

1. Helping you keep a closer eye on your occupancy levels
2. Automatically creating an operating budget, and helping you track all your expenses
3. Making it easier to send out bills and collect your fees

Let's look at how it all works.

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Keeping on top of your occupancy

Almost all the revenue you make at a preschool or daycare comes from the children’s tuition and fee payments, so making sure your occupancy is as high as possible is critical.

As you well know, though, that's something that's much easier said than done.

You need to stay on top of attendance for each room every day, watch for children aging out of the program or switching sessions, and make sure ratios are correct and correlate with changes in staff. It’s a lot to keep track of — but it’s a whole lot easier with a childcare billing software.

With a digital program (like Famly), you can have all the information necessary packaged into easy to read charts and graphs so you can:

• See what rooms need fewer staff members due to lower attendance
• Find what days are continuously slower, so you can provide ad hoc sessions for extra fees
• Immediately see openings for new enrollments if you have a waitlist
• Make sure your current enrollment numbers meet the requirements, and identify areas for improvement

And all this information collects over time so you can use historical data to plan for the future. Childcare billing software lets you zoom out, see the big picture, and fill in the gaps — all within an app. If you can stay up to date on your enrollment, it will be that much easier to stay within your budget. If you'd like to read a bit more about why it's important to get strategic with your occupancy tracking, you should read this piece by ECE finance expert Louise Stoney.

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Finding a budget that works for you‍

There are a lot of components that go into making a budget, such as:

• How high does your enrollment really need to be? 
• How much money do you need for required resources and materials? 
• What staff benefits do you want to provide and how much do you need to afford them? 

A lot of time consuming paperwork and foresight goes into figuring it all out, but a childcare billing software can help you answer all these questions. 

The right software can create a target budget for you based on your center's data, and can calculate a necessary cost per child for you. That way you know exactly where you need to be with your finances at all times. You can also be notified when enrollment drops below your desired amount so you can act quickly to address it.

In order to continue providing the best care possible, you need a sustainable business model and an accurate, up-to-date budget is at the heart of that.

Supplementary funding can also be a saving grace for many early education settings when the budget is tight or when some unexpected costs arise — but finding that additional funding can be a job all on its own. 

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Quick and easy payments

Budgeting and planning are great for nursery finances, but at the end of the day, the most important thing you can do for your childcare center is actually getting paid — regularly and on time. 

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. It’s a lot to handle and many managers and directors have to do it along with a laundry list of other daily tasks, but an childcare billing software can take care of it all.

Once parents enroll their children, if you’re working with management software, they can input their bank information and sign up for automated payments. The parents receive regular automatic invoices so everyone is on the same page, without worry or forgotten check books. And 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 touch a thing.

With reports, invoices, balances and payment handling all compiled in one location, there’s also no more need to manually upload stacks of forms and paperwork, saving time and cutting costs.

Nothing is worse than getting to the end of a quarter and realizing you need to cut financial corners somewhere. And of course it’s hard to plan for surprise extra costs, but if you’re always getting paid on time, your planned budget will always be reliable.

When you have everything set up and automated, childcare billing software also makes it easier for the parents to add on additional services like ad hoc sessions and meal plans, without emails or back and forth phone calls.

With so many factors at play, and so many different systems for keeping track of revenue and costs, it’s never been harder to stay on top of finances in early education.

But by monitoring enrollment, creating a budget for you and automating tuition payments, new software can make your life as an early childhood provider easier, and help guide your center into a prosperous future.