Parents are busy people as they no doubt tell you every time they drop off or pick up their child at your facility. They arrive with a pinched look on their faces and move like a film being played at top speed. Mentioning the bill or, worse, a delinquent payment may spur an outburst to rival their toddler's.
Simplifying billing to make the parents’ lives easier takes part of the stress off them and your staff.
Here are some ideas on streamlining your billing process.
If the parents do not know your requirements, they cannot be expected to follow them. Your first step is to develop a payment policy and provide a copy to all parents and payers.
Specify your regular rates, late pick-up charges, and late payment fees. Include the penalties for non-payment, including account suspension. If you have a list of miscellaneous charges, be sure to include those, too.
Make the policies accessible at all times for parents, agencies, and staff so there is no misunderstanding about payment and billing.
When setting your rates, minimize the number of variables that can change them. Depending on your program you may wish to include several types of payment activity:
Define your fee per service period or as a daily rate and provide the calculation for prorated fees.
Reduce the number of invoices you send each parent, too. Place everything due on a single invoice with an itemized list of services and fees. Once the invoices have gone out, send periodic reminders.
You may never have a paperless office, but your billing system can certainly save a few trees. If you shift to all-electronic billing, you can reduce the amount of storage you need for billing invoices, receipts, and late notice fees.
It eliminates printing and distribution, so you save on paper, ink, envelopes, and postage. Electronic billing also reduces human error caused by misfiling papers, manual payment tracking, and manual calculations.
Using a software application for your invoicing allows you to manage all your billing from a single computer screen. You can generate a variety of reports, including: transaction summary reports, payment reports, and account receivable reports to show you part of your financial picture.
From the same screen, you can print invoices (if you have not yet gone paperless) individually or as a batch. You can then email the invoices, statements, transaction reports, and tax statements to the appropriate people.
If you are using a complete childcare management solution, you do not even need to put in the numbers. The values populate with the data captured through check-in monitoring and the registration records.
Most parents prefer to have the option of paperless billing. Like you, they will save storage space in their homes and appreciate the ability to pay online via a link to a payment portal. No need for envelopes or stamps. The billing process is seamless and easy.
The more types of payment you can accept, the easier it is for the parents. Along with electronic billing via email or through a parent portal, they will also want flexibility in how they make payment. You have several options:
You do not need to offer all options. Select the ones used by the families and community you serve.
EFT can be used for weekly or monthly payments that are transferred directly from the parent account and into yours. Parents can set up a regular recurring payment with their bank; the payments will continue without any further action from the parents.
Similarly, recurring credit card payments can be set up. Use an encryption process to store the credit card information in your system to collect payment when tuition is due. Many of these systems can also send a notification if the credit card is about to expire.
The beauty of EFT and recurring card payments is that they occur without additional action from the parents or your staff.
Online payments through a secure parent portal allow credit card payments to be made online. Parents can access their account balances and provide payment when due. The system can send periodic reminders until payment is made. A delinquency flag will show on the account when a balance is past due.
A similar method can be offered at check-in. Staff can remind parents of the balance due upon checking their children in, and the parent can provide payment at that time. You can allow payment through the facility system, similar to online payment, or you can obtain a credit card reader like retail establishments use.
If you choose to get a card reader, be aware that most credit cards now bear a chip meant to decrease fraud. Make sure you get a card reader that will accept both magnetic strip and chip reading.
Some parents may wish to pay by cash or money order. If this is common in your facility’s community, those are payment options you need to consider. If you have children who are receiving a subsidized rate, many childcare management solutions can be set up to process vouchers and co-pays.
In the event you need to issue a refund, make the process as efficient as possible.
Streamlining your billing processes can certainly make a parent’s life easier but your business will benefit as well. With automated processes creating the invoices, processing payment, and notifying or flagging late payments, you reduce the cycle time between billing and payment, smoothing out your cash flow and making it easier to project revenues.
Your accounts receivable shrinks and your data entry tasks are significantly reduced as well. That makes your life easier and frees up time you can use to grow your business. With such happy parents, you can be sure of receiving plenty of recommendations.