The most significant expense for childcare providers is labor, typically representing 70% of your budget. How much of that goes toward billing?
You probably pay a person or team to enter data and keep customer files up to date with tuition, fees, and other charges. Then you pay for paper, ink, postage, and time spent processing payments as they arrive.
By automating this portion of your business, you can not only save substantial time and materials, but you can also improve invoice payment rates and cash flow. Automated billing removes much of the administrative time used in this repetitive task.
Where can you save with automated billing?
Automated billing is a process used to handle regular invoicing and follow-up on unpaid bills and other financial record keeping. Automated billing systems can securely transfer funds between customer and business as well as company and bank.
The process ties into your business or accounting software or is part of a comprehensive childcare management system. It receives data from enrollment, attendance, and other applications to generate a bill that includes tuition and fees, including late pickup and late payment fees.
With this type of system, you no longer need to input payments and fees manually, nor must you track late fees each period. Automated billing can even notify you and your clients about termination due to nonpayment.
Most automated billing systems allow you to generate batch and single invoices with individual statements listing itemized charges and fees for each client. Then the software sends an electronic invoice via a secure parent portal that allows your customers to pay online with a credit or debit card or by allowing electronic funds transfer.
Once you receive payment, the automated billing system processes payment without your intervention and places the funds in one or more bank accounts as you specify.
You save on labor costs and you don't need to purchase paper, envelopes, or ink, pay for postage, or pay someone to track invoices and payments.
With automated billing, you get paid faster. In traditional billing processes, a business emails invoices to customers that indicate a payment deadline.
In most cases, checks sent to the business are batched for processing at the end of the payment period. The funds are unavailable until someone processes the payments electronically or takes them to the bank for processing.
A system like the one described above can create an uneven cash flow. At times, your business may not have access to enough funding to pay for emergencies, purchase equipment, or take advantage of opportunities to save with a time-limited discount on goods or services.
Automated billing makes the invoice available to the customer immediately, and online payment processing is nearly instantaneous. All invoicing and billing occur on the same date each period. You receive and process individual payments throughout the period, and the payment process is nearly instantaneous. You don't need to wait to batch payments for processing manually.
Automated billing also improves revenue by automatically adding late payment fees and pickup fees that could fall through the cracks of a manual system. It also automates charges for special programs or classes that fall outside of regular tuition. You can quickly receive advance payment for events early enough to use the funds to pay for it.
Accurate billing reduces underpayment and human error. All data is stored in a central location, and you don’t need to update multiple records to make a single change.
Fast and accurate communication is critical to business success. An automated system sends periodic messages to clients with reminders for payment and due dates. It keeps the expense at the forefront of your customer's minds and reduces uncertainty. There is no "surprise billing" with an automated system.
Manually calculating every expenditure and generating a report that illuminates drags on your finances is a labor-intensive process. An automated system can capture the data effortlessly, aggregate and classify it, and provide a report that shows where you can optimize spending.
You streamline your billing process and workloads while relieving administrative staff of repetitive tasks to more meaningful work. You now have time to research and implement best practices and improve operations.
Automated billing reduces the time and resources required to invoice families and process payments. It also reduces human error that can be introduced with manual data entry and calculation.
The right system will ensure invoices are accurate and complete before sending them to families on the designated date. It tracks everything from tuition to late payment and pickup fees, automatically adding them to the appropriate invoice.
Once you receive payment, the system processes payment immediately, and the funds arrive in your accounts throughout the payment period. You streamline your cash flow and increase your revenue because you never again miss late fees and other payments.
To learn more about how an automated billing system can help you grow your business and maintain it with lower costs, contact EZChildTrack.