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How to Change Child Care Billing Rates

published | 7/16/2008

Procare Software Billing Software Budget Business Planning Tuition

You may be thinking about increasing child care fees at your daycare, preschool or similar child-centered business. It certainly would help to generate more revenue, but you’re not sure how to get the message out. You want to retain as many children from your current enrollment as possible, but you realize some people may be upset.

How to Change Child Care Billing Rates

It’s an uncomfortable subject, as families often plan and budget for their child care expenses far in advance. You may be wavering and wondering how to effectively increase tuition rates without rocking the boat too much.

How to Change Child Care Billing Rates

Here are a few suggestions for how to change your child care billing rates, while reassuring parents that these costs will maintain or increase the high-quality care you provide their children.

Put it on Paper

Start by writing down your reasons for this necessary increase in your child care billing rates. If parents understand why, they are apt to accept it more easily. Some reasons might include the rising cost of utilities, which affects both summer cooling / air conditioning costs, as well as winter heating.

Another factor might be gasoline prices, especially if your center provides transportation for the children. Food costs are also on the upswing. If you provide snacks you might consider asking the parents to do so instead, on a rotating basis. Typically, though, the most expensive part of providing quality child care and early childhood programs is payroll.

Hiring qualified instructors to supervise their children is of the utmost importance, and meeting the teacher-to-child ratio requirements that allow for individualized care, means hiring more staff, and therefore higher payroll costs.

Quality Child Care

The idea to get across to families is that quality child care is a priority at your center. In order to continue providing the level of services families have come to expect, a modest increase in rates is necessary. If you have held rates steady for some period of time be sure to point that out like this:

“Rates at ABC Child Care have remained at their current levels for more than three years”.

Empathize with what parents are going through too and pledge to hold costs at their new levels for as long as you reasonably can. Perhaps you could say:

“We understand that having quality child care at predictable rates is important to your family budget. We pledge to maintain our new rates for at least 12 months and give you ample notice if a change is required down the road.”

This emphasizes that ultimately, these costs go towards the care of each child, and assuages fears that costs will continue to rise moving forward.

Cashflow & Cost Cutting

Another thing to help the financial bottom line at your center is, of course, to keep costs under control and maintain a steady cash flow. These are areas in which Procare can help. Especially with making sure you get paid on time.

Procare’s Tuition Express payment processing service is the key. Tuition payments are automated with funds transferred from each family's bank account or charged to a card and the money is deposited to your account the very next business day! You also have options to let parents pay online, at check-in, or even at the front desk. Regardless of which methods you choose, you’ll rest assured knowing your center receives every dollar in a timely, predictable manner.

Final Thoughts

Raising the costs of your child care or daycare center can be a tricky task. You are sympathetic to the budgets of the families you serve, but at the same time, you have to ensure your business can continue to run.

By being open and clearly communicating with parents throughout the billing process, and informing them about each expense that is causing prices to rise, you are likely to retain their business despite higher costs. Similarly, adopting solutions that keep track of billing, payroll, and cash flow will help you stay on top of your finances. Here’s to wishing you every success in your child care business and until next time, cheers!

Looking to simply the child care billing process? Learn how Procare can help. 

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