Running a small business has its challenges, and collecting money is a big one. With daycare, this can even be a more difficult challenge because of the caring nature of the business. But the bottom line is that it is a business and needs money to run. You are providing a service—a very valuable one—and it is the parent’s commitment to pay.
According to daycare.com, one of the most common problems that daycare centers face is nonpayment by parents for child care services rendered. Sometimes it becomes easy for parents not to pay. Perhaps you gave them a little leniency a few months ago and now they assume they have that again; maybe you ask for payment after services have been rendered instead of before, or maybe you don’t have a strict policy about late payments. However, late payments can turn into no payments, which can be detrimental for your business.
The following are some tips and guidelines to help prevent nonpayment before it happens:
- Have a contract with guidelines on payment, late fees, and consequences of nonpayment. When the family is enrolling, go over this with them.
- Keep reminders in your front lobby of payment due dates and late fees. You can post a larger, more obvious notice the day before tuition is due.
- Stay true to the agreement and charge the late fees at the time you say you will.
- If a family is late with a payment, speak with them immediately. A face-to-face conversation may be best; don’t just send a note home with their child.
- Be consistent with all of your families. Treat them all the same, whether it’s charging late fees or refusing service when nonpayment occurs.
What happens if a family isn’t paying? You’ve tried it all, but they have not paid their invoice as expected and you have employees, vendors, and utilities to pay and a building to take care of. Here are some steps to consider for those past due accounts:
- Remind them in person of what is owed and that it is due.
- Reference the terms they agreed to in their contract and what happens in the case of nonpayment.
- Partner with a collection agency with experience in collecting for childcare centers.
Debt Collection Services for Childcare Centers
Rocket Receivables can handle your past due accounts with an empathetic approach so you can handle the rest of your business, keeping children engaged and learning.
Laws regarding collection and recovery can be tricky, and Rocket Receivable professionals are experts in this field. With industry-leading compliance and risk management standards along with controls tailored to comply with TCPA, HIPAA, FDCPA, and all state collection rules and regulations, Rocket Receivables can help with your daycare debt collection and see that you get the money owed to you.