How to deal with parents who consistently pay tuition late!
Collecting late tuition is one of the more unpleasant jobs of running a daycare. Use the following tips and suggestions to make this task a little easier.
Don’t undervalue the care you give.
Child care services are of value! A daycare has financial obligations. Expect your parents to pay you on time as they would their mortgage or other expenses.
Set policies from the beginning.
Tuition policies should be covered thoroughly upon enrollment to prevent misunderstandings or any miscommunication. Have the policies and late fees clearly defined in your parent handbook and then cover them verbally, reading through the handbook with each parent. Don’t give them the policies to read and assume they will. Have them sign an agreement in your enrollment forms saying they have read them. I have found that most of the time, they don’t actually read everything in detail. Let them know that you have a business to run so the policies and late fees will be strictly enforced. Strongly encourage new parents to pay on Friday for the next week. This is most people’s payday and ensures prompt payment for the following week. Click here to see my late payment policy.
Be consistent and always enforce the late policy.
Parents will from time to time come to you with a reason or excuse that they cannot pay on time. As much as you want to be the “nice guy”, always stick to your policy. When you make exceptions or waive the fees, it sends a signal to the parent that it is ok to pay late. They may think they can sweet talk you anytime they are running behind and you will allow it. If you do run into a truly dire situation, you can make the decision to give an extra week or waive the late charges, but I would suggest sticking to your policy and only making exceptions in extreme cases.
So, how do you communicate without sounding heartless?
If a parent is running a few days late, you don’t always have to have a conversation. Simply stick to your policy. Let them pay the late fees and move on. They will hopefully feel the pain of the late fees and start paying promptly. Just make sure they pay the late fees.
If a parent wants to pay extremely late outside of your policy allowance, simply say “I am so sorry you are going through (whatever it is) but because this is a business, I do have to stick to our policies. I hope you understand. Let me know if there is anything else I can do to help you in this situation.” Recommend a food or clothing donation center if that’s something they need. Offer to add them to the top of your waiting list and tell them to come back when things get better and that you would love to provide them service again in the future.
From my experience, if you allow a parent to go even 2 weeks without paying, they can get too far behind to catch up. In the beginning, they don’t intend to leave you with a balance, but I have seen it happen time and time again. They will often say “I will pay. I would never leave a balance.” They are usually sincere when they say this, but then life happens, they get overwhelmed and run away.
What If a parent avoids you?
The first day they are late, charge them the late fee or whatever your policy is and assume they forgot. On day 2, post a friendly reminder sign, leave a message on the check-in/out computer if you have one, or write a friendly reminder on the child’s daily log. Day 3, you should make a phone call to the parent. If you cannot reach one parent, you may want to try the other parent responsible for payment if there is one. Remind them of your policies and ask when they will be making the payment. If they do not answer your phone call, leave them a voice mail stating that it is important that they call you back. You can also text or email. This works great with some parents who will not pick up the phone.
You may want to also write the detailed fees due on a late notice form and hand it to them upon arrival or pick-up. You can place it in a cubby or bag, but try to hand it to them in person. If your policy is that tuition must be paid by the end of the week to attend the following week, let them know on Friday what payment must be received on Monday morning. Be clear and concise. Let them know that they will not be able to drop off unless the balance is paid. The point is to not harass, but to professionally communicate that you expect prompt payments.
Collecting money from parents is not fun, but it is a part of the job. Think of all the equipment you could buy or the raises you could give with what has walked out your door! When that uncomfortable feeling of confrontation starts to overtake me, I remember what I once heard someone say. “Run towards your fears!” I know that fear is a strong word to use in this situation, but it is fear that causes us to draw back and not take action in many areas of our lives. Eleanor Roosevelt said "You gain strength, courage and confidence by every experience in which you really stop to look fear in the face. You are able to say to yourself, 'I have lived through this horror. I can take the next thing that comes along.' You must do the thing you think you cannot do."
Conclusion:
Run your center like a business because it is! Set policies and stick to them. Give great care to your children and great service to your parents. Don’t be afraid to confront and collect.