How To Deal With Parents Who Consistently Pay Tuition Late!
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Collecting late tuition is one of the more unpleasant jobs of running a daycare or child care center. 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 great value! You are providing parents with the ability to work and earn a living while caring for their children. Child care is an important contribution to society! The service you provide is extremely valuable.
At the same time, remember that you are running a business. A daycare or child care center has financial obligations just like any other business. Expect your parents to pay you on time as they would their mortgage, utilities, or other expenses.
Set childcare policies from the beginning.
Have your tuition policies and late fees clearly defined in your parent handbook .
Tuition policies should be covered thoroughly upon enrollment to prevent misunderstandings or miscommunication. Don't just give parents the policies to read and assume they will. Most of the time, parents don't read everything in detail.
Instead, cover policies verbally, reading through the handbook with each parent before sending them home with the handbook. Have parents sign an agreement in your enrollment forms saying they have read all policies and understand them.
Communicate to parents that you have a business to operate so the policies and late fees are strictly enforced. Strongly encourage new parents to pay in advance for the next week.
My late payment policy is as follows:
"Payment is due on Monday of each week. If tuition is not paid by Tuesday at closing time, a $10.00 late fee will be charged to your account on Wednesday, $5.00 on Thursday, and $5.00 on Friday. Children with a past due balance will not be allowed to attend the following Monday unless the past due balance is paid in full. No account will be held for more than one week. We do not carry balances. Payments may be paid bi-weekly or monthly if tuition is paid in advance. If for any reason you decide to withdraw your child from Noah's Ark Daycare, a two-week notice is required."
Be consistent in enforcing the late policy.
Sometimes, parents will 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 signals to the parent that it is ok to pay late. They may think they can sweet talk you anytime they run behind, and you will allow it. Of course, if you run into a dire situation, you can give an extra week or waive the late charges, but I suggest sticking to your policy and only making exceptions in extreme cases.
Communicate clearly and effectively.
If a parent runs a few days late, you don't always have to have a conversation. Simply stick to your policy.
Charge the late fee to their account, 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 your policy allowance, say, "I am so sorry you are going through (whatever it is), but because this is a business, I must stick to our policies. Therefore, if your payment is not received by such-and-such date, I will be forced to offer your child's spot to another family. I hope you understand. Let me know if there is anything else I can do to help you in this situation."
If they need to give up their child's spot, 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 their service again in the future.
From my experience, if you allow a parent to go even two weeks without paying, they can get too far behind to catch up. Of course, they don't intend to leave you with a balance in the beginning, but I have seen it happen repeatedly. 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, and they get overwhelmed and run away.
Have a process for handling late tuition.
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, charge the 2nd late fee, leave a message on the check-in/out computer or parent app if you have one, or write a friendly reminder on the child's daily log.
On day 3, you should make a phone call to the parent. If you cannot reach one parent, 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 voicemail stating that it is important that they call you back. You can also text or email. Texting works great with some parents who will not pick up the phone.
You can 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 give 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 for them to attend Monday morning. Be clear and concise. Tell them they can only drop off if the past-due balance is paid. The point is not to harass but to professionally communicate that you expect prompt payments.
If payment is not received by the specified day, let the parent know you have released their child's spot. If they owe any tuition, let them know the amount due, and inform them that you give a 30-day grace period to pay any outstanding balances before sending it to collections.
But what if a parent pays the past due balance but now owes it again for the current week?
Again, it comes down to your policy. In our center, as long as parents have paid the past due balance, I allow them to return on Monday although tuition for the week will be due again. If payment is not received Tuesday night, they are charged a late fee every day until paid. I will send a text and email on Friday stating what must be paid (all past due balances and late charges) before attending the following week.
Yes, sometimes I repeat the same weekly process with specific parents. But, unfortunately, it's part of running a business. And on a positive note, you receive an extra $20-$50 weekly from this family due to late fees.
Consider automatic bank withdrawal or a “pay in advance policy”.
If you use a childcare management system such as Procare, you can require tuition to automatically be deducted from your parents' bank account weekly or monthly. Payments transfer from each parent's bank account or credit card (if applicable) directly to your account on the next business day. Automatic drafts will avoid hours of chasing down payments and help alleviate stress.
A more stringent manual policy option simply requires tuition for the next week to be paid on Friday, with no exceptions. If payment is not received, their child cannot attend the following Monday. Continue to charge late fees and give them one week to get their account current before releasing their spot.
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Conclusion:
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 overtakes 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 fear causes us to draw back and not take action in many areas of our lives.
Run your center like a business because it is! Set policies and stick to them. Give great care to your children and excellent service to your parents. Don't be afraid to confront and collect.
Did this article help you? Please share your comments below! And be sure to share this blog post with your fellow child care providers! Together we can make a difference!
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