How to Chase Payments at Your Child Care Center

It’s Not Easy To Ask For Money!

Running a child care center requires a special set of characteristics. On the one hand, you need to have a great deal of empathy and compassion, while at the same time needing to be disciplined and firm to ensure everything is operating up to standard.

Parents of young children are perhaps the busiest demographic there is, which presents a whole set of challenges as a child care provider on the administrative side of things. Between working all day, rushing over to pick up their child, preparing dinner and getting ready for bedtime, even the most well-intentioned parents can accidentally let a payment or two slip through the cracks.

Although it can be a bit awkward, chasing payments is a reality for any child care provider and needs to be handled effectively. Without money coming in, you will not be able to pay your staff, pay your rent, restock supplies, and everything else that is crucial to keep your business up and running. Plus, the more that payments are delayed, the harder it will be to keep track of your finances and collect them from parents.

The best way to handle chasing payments is by having a system to collect payments automatically, but even in that scenario, you may end up needing to chase payments one way or the other. In this article, we’ll go over best practices for chasing payments at child care centers so you can spend less time collecting and more time improving the care you provide.

Don’t Feel Like the “Bad Guy”

Remember that you are not doing anything wrong by trying to collect payments. Parents will have reasons ranging from simply forgetting to not having enough money in the bank to pay their latest invoice, but you should never think that you are a bad person because you are asking for the payment you are owed. Your business has provided a service for an agreed-upon price, and you deserve to be paid for those services.

Think of your own payments that you make regularly, such as your credit card, mortgage/rent or telephone. Although you may not enjoy paying these bills, you recognize that they are services that you have enrolled in and need to pay for — and your business is no different.

The first step towards chasing payments is recognizing that you should never feel bad collecting what you are owed. You provide an incredibly valuable service to parents by looking after the most precious things in their lives, and there is no reason why they shouldn’t have to pay the full amount they have been charged in a timely fashion.

Set Expectations at the Start

As soon as a child is enrolled, the first thing that parents should receive is a parent handbook. Here, important information about your center will be provided, notably your payment schedule, methods of payment and how you handle late payments. Make sure that parents have been sufficiently briefed on your rules and expectations, and that they are confident that they will be able to abide to them.

Enforce the Rules

Rules and deadlines are essential for motivating parents to submit their payments on time and in full. It can be tempting to make exceptions, especially when you can see a parent is truly struggling to submit their payment on time. This is why late payments are one of the most common pain points that child care administrators face, and how a few exceptions can spiral out of control so quickly.

It can be very tough but remember: your rules were known and agreed-upon right from the start, and you have a business to run with many expenses of your own. Special exceptions in extreme situations may be inevitable, but don’t make a habit of being relaxed about your rules. The more you let things slide, the more parents will let their priorities about payment slide as well.

Have a Strong Relationship with Parents

The better your relationship is with parents, the harder you will be to ignore when it comes time for payment. When parents are able to put a name and face behind their child care payments, it will add a personal touch that just might help them keep more on top of their payments.

For example, consider the differences between these two thoughts:

• “They are asking for payment now.”
• “Sarah is asking for payment now.”

See the difference a little personalization can make? An anonymous entity is harder to make a connection with, but when a parent knows you well, they will hopefully not want to let you down by giving you a hard time collecting payments.

Be Present at Pick-Up and Drop-Off

Avoid being out of sight, out of mind. It’s easy to ignore a phone call, text message or email, but an in-person greeting at pick-up or drop-off time is impossible to miss. Being there when parents are at your center is your best opportunity to ensure that they are aware of the status of their payment and that they need to send it over.

For larger child care centers with many classrooms, it will be impossible to be everywhere at once. Instead of sticking to one classroom, try to be present in common areas like hallways or entrances.

Be careful not to only make yourself seen when it’s payment time, though. Again, you want to maintain a positive relationship with parents, so be sure to say hello when everything is status quo as well.

Work with Parents in Special Cases

Depending on the situation and your flexibility, it may be easier to adjust your payment process for certain parents who are repeat offenders. For instance, for families who are consistently late by 9 days because that is when they receive their payments from work, a different payment due date may be all it takes to get your payments on time.

Send Reminders

To be proactive, keep parents in the loop about when payments are approaching. Include a reminder in regular communications like a newsletter. You can also place posters around your center on bulletin boards or the entrance reminding parents when a payment date is approaching. For parents who did not pay attention to the group reminders, also send personal reminders by email.

If a payment is late, send more reminders by emails to ensure that your previous communications have not gotten lost or forgotten. Sometimes it is just a matter of receiving an invoice at precisely the right time to prompt a parent to send over a payment.

Speak with the “Finances Parent”

Raising a child is a partnership, and each parent has their own strengths and responsibilities. It may very well be the case that you have been speaking with the “daycare parent” — meaning the parent who handles pick-up and drop-off — but the “finances parent” is actually the other parent who does not receive any of your messages.

If you are consistently not receiving payment from a parent, check your records to see if you can identify which parent is actually depositing the money. This will be easier for electronic payments, but if you are accepting cash then you can try asking the parent the next time you see them. If they say it is, in fact, their partner, then go directly to the source next time to follow up about a late payment.

Accept Easy Payment Methods

The more barriers you can remove, the easier it will be for parents to make their payments on time. For example, if you only accept cash, then parents will have to remember to go to the bank, which can be easy to forget or even not possible on a very busy day.

Electronic payments — whether through a bank account or credit card — can make it significantly easier for parents to send payments whenever, wherever and however is most convenient to them. When reminded in-person, they may be able to send it through their phone right then and there.

Going one step further, some parents may also be willing to sign up for automatic payments so they don’t ever have to think about it. The best way to not have to chase payments is to guarantee they come in automatically.

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