Why Childcare Centers Lose Revenue – and How to Fix it

Why Childcare Centers Lose Revenue – and How to Fix it

Managing a childcare business is a unique role that means you have a lot on your plate. You know that staying on top of your parent payments is crucial, but it can fall to the wayside as you focus on the day to day tasks that keep you busy. For this reason, many childcare businesses struggle to track their parent payments – and this can make it hard to pinpoint where the losses are coming from.

Making sure that parents are making payments is key, so that you can spend less time pouring over records, following up with parents that are late and trying to identify where your money is going. We’ve compiled a quick list below to help centers like yours gain your time back and more importantly- stop losing money!

Make Paying Easy

Most of us don’t carry checkbooks in our purses or pockets anymore. If a business is only accepting cash or check, it becomes an obstacle to pay for that service, and much more likely to be forgotten.

Accepting credit or debit cards in house seems like a good move. However, that means you or your staff is taking the time to physically swipe cards and parents have to be present to pay (and again, may forget if they are rushing in our out).

The best solution is to allow parents to pay from anywhere. Using a management software that has an app for parents means that parents can manage their own payment information and make a payment from anywhere.

This reduces the pain points mentioned above, and you’ll get bonus points from the parents who will be happiest with a solution that is easiest for them.

Enforce Late Payment Penalties

No one likes late fees. Parents don’t like to pay them, and Directors and Owners don’t love giving them. However, enforcing them sets a boundary for your parents and lets them know that not paying a bill isn’t acceptable.

Additionally, if using a system to accept parent payments, it’s worth checking out one that has an automatic late fee feature. This helps to take some of the responsibility off your plate. Let your parents know if they are more than 24 hours late (or whatever time frame you allow), that a late fee will automatically be added to their bill and processed when they pay.

Setting that expectation up front means your parents won’t be surprised by late fees and you’ll feel less guilty implementing and enforcing them.

Require or Incentivize for Auto-payment

Allowing parents to autopay has become a necessity. Not only does that mean regular, recurring revenue for your center (with no follow up required on your part!), but it’s also the easiest solution for the parent. Many adults prefer to pay most bills by autopay, so they know they aren’t late and are on top of all of their bills.

Consider requiring autopay enrollment for all parents or offering an incentive to parents who set it up. We’ve seen centers do a small discount on tuition for parents enrolling in autopay or a small increase in tuition for parents who don’t enroll in autopay. You’ll know what will work best for your parents.

Once you’ve set up a system to manage your parent payments, along with automatic late payment fees and most of your parents are on autopay, you should be able to sit back and relax knowing that no revenue is getting lost in the cracks.

 

Possible New Policies in Childcare

Possible New Policies in Childcare

We’re experts at building software, not politics.  So, we can’t prognosticate about the likelihood that any of these changes is enacted or whether they should be.  But, if changes in government programs could happen, we thought it was worthwhile to understand what those changes could look like.  Here’s our analysis:

 

During the presidential election campaign, the Biden campaign included on its website several proposals for childcare.  The proposal builds on the proposed Child Care for Working Families Act sponsored by Senator Murray and Congressman Scott.

 

 

Universal Pre-Kindergarten

Both proposals include provisions to provide federal funding and state requirements to offer pre-kindergarten for all 3- and 4-years old children.  Importantly, the most recent proposal includes a provision that would allow existing preschool providers to participate in this program, meaning a private or non-profit provider could qualify for funding just like a school district, for this program.  What we think this means is that current providers of preschool and childcare for 3- and 4-year-old children will need to ensure that they’re compliant with the program – namely with respect to tracking and reporting attendance, incidents, and learning assessments – and will need the ability to invoice government agencies for reimbursement.  It likely also means that many parents who pay for care for children in those age ranges would switch from private paid to government paid, or some combination of the two because it’s likely the government funding will only cover a portion of the day.

 

Refundable Tax Credit

Both proposals include a provision that would provide a refundable tax credit to families in an amount equal to what the family paid for childcare in excess of 7% of the family’s income.  This would increase the need for childcare providers to give parents accurate and timely tax statements.  Perhaps more interestingly though, it also makes childcare more affordable for families without reducing tuition which suggest some families who do not have children in childcare today may be able to afford it and/or families may be able to expand the use of childcare with an existing provider.  This trend should be a big positive for the industry because it would increase utilization without reducing tuition.

 

Bonus Payments

Both proposals include provisions for bonus payments to childcare providers in certain circumstances.  The bonus payments would be in addition to subsidy payments or parent payments.  The circumstances envisioned include care during nontraditional working hours and care for children with special needs.  We think these bonus payments would make programs more financially viable.  For example, bonus payments for care during nontraditional working hours would allow a school to pay teachers more during those hours, attracting staff while maintaining profitability.

 

Extend CCDBG Funding to Afterschool

Both proposals include a provision that would allow Child Care Development Block Grant funding to be used for after school care for children up to the age of 13, rather than just for preschool age children.  This would likely allow for expanding enrollment in after school programs.  It would require those programs to track attendance and have the ability to invoice state agencies that distribute CCDBG funding which are likely capabilities most after school programs do not have today.

 

 

As we said at the beginning of this article, we’re not political experts, so we don’t what, if any of these changes will be enacted.  We hope that our summary of the most likely changes and the implications those changes would have for your childcare center or after school program is helpful.

 

 

Millennials, Gen Z and the Future of Child Care

Millennials, Gen Z and the Future of Child Care

As a company submerged in the world of child care, we know how vital child care providers are to our economy. Child care is essential for working parents. Additionally, students who attend high quality child care facilities early in life develop stronger skills, are less likely to require special education classes, and are more likely to earn higher wages and have fewer interactions with the justice system as adults.

With an ongoing pandemic and an upcoming election, what does that mean for the future of child care? The answer relies on Millennials and Gen Z.

Millennials make up roughly 35% of the workforce, which makes their generation the largest generation in the U.S. labor force (source). Gen Z, while up and coming into the workforce, is reported as the hardest hit for job loss before and during the pandemic (source). The child care industry should look to these two generations to understand where the industry is headed.

 

Where do the younger generation’s priorities lie?

 

  • According to Next100 and GenForward, 81 percent of young adults (in these two generations) believe that access to affordable, high-quality child care is an important issue.
  • 72 percent of respondents said that the lack of high-quality child care programs and their cost is a barrier to achieving their professional goals.
  • This data is confirmed by the United States Census Bureau, which finds that one in five of working adults said they are not working is because COVID-19 disrupted their child care arrangements.
  • Of those not working, women ages 25-44 are almost three times as likely as men to not be working due to child care demands.
  • Millennials have also been slower to establish households than previous generations have been. They tend to get married and have children later in life. However, Millennials now make up the majority of annual U.S. births. If this trend continues into Gen Z, Millennials and Gen Z will be a topic of the child care industry for years to come.

How does cost factor in?

 

How could the election affect the future of child care?

 

  • Child care is a topic that transcends party lines. Young Democrats, Republicans and Independents all agree that child care is important. 86 percent of Democrats, 79 percent of Republicans and 76 percent of Independents identified child care as an important issue.
  • A whopping 92 percent of those surveyed from Care.com indicated that child care is a topic they feel should get more attention from the government as a result of the pandemic. 71 percent of families say that child care policies will impact how they vote in the upcoming election.
  • The Child Care is Essential Act, the Child Care for Working Families act and presidential candidate Joe Biden’s Build Back Better plan could potentially add millions of dollars into the child care industry, expanding access for millions of families.

 

Younger generations are coming into the workforce and creating families in massive numbers. This means that Millennials and Gen Z’s employment decisions will be dependent on the child care industry for the foreseeable future. With COVID-19 and job loss among this demographic, cost and accessibility will be huge issues for those re-joining the workforce. These groups are now having families, so it’s no surprise that they will demand more affordable and accessible care. In an upcoming election year, the future of child care will be a hot topic with one of the largest groups of voting age.

How to Clean Classroom Toys

How to Clean Classroom Toys

COVID-19 is known for being dangerous because it is primarily spread through respiratory droplets. However, it is also possible to catch the virus from certain surfaces. It can live on plastic from a few hours to a few days. That is why it is imperative that every teacher know the safest ways to clean toys and which toys to leave out of the classroom. Smartcare has compiled a list of helpful tips from the CDC specifically for childcare workers.

Any toy that has been placed in a child’s mouth or contaminated by body secretions or excretions should be set aside until it can be properly cleaned by someone wearing gloves. They should follow these steps:

  1. Clean with water and detergent
  2. Rinse
  3. Sanitize with EPA-registered disinfectant
  4. Rinse again
  5. Air dry the toy

Each of the toys should be kept to a specific classroom. Toys should not be passed to a different group before being washed and sanitized.

Unfortunately, you cannot wash books. However, the CDC has deemed books not a high risk for transmitting the virus. Your classrooms should be completely fine to have as many books as you wish.

Fabric toys such as stuffed animals are fine to keep in the classroom as long as they are not passed between the kids. It is best for each child to have their own fabric toy that they keep through the entirety of the day.

Once a child has used a toy, they should not share it until it has been properly washed. The toy needs to be kept in a container of soapy water. This way the teachers are aware which toys have been used. This container must be kept out of reach of children for a risk of drowning.

Lastly, any toy that you feel cannot be fully cleaned and sanitized should not be used.

Source: https://www.cdc.gov/coronavirus/2019-ncov/community/schools-childcare/guidance-for-childcare.html#:~:text=Children’s%20books%2C%20like%20other,cleaning%20or%20disinfection%20procedures.

10 Children’s Books That Teach Students About Diversity

10 Children’s Books That Teach Students About Diversity

Kids are never too young to begin learning about diversity. Little minds are sponges to what they see and hear. There is no better time than now to fill your classroom with books that teach the value of diversity. Here are some books about diversity along with their Amazon links:

Diversity Ninja

Whose Knees Are These

I Am Enough

The Day You Begin

It’s OK to be Different

We’re Different, We’re the Same (Sesame Street)

Strictly No Elephants

This Is How We Do It

Remarkably You

Just Ask!

The New Normal

The New Normal

Smartcare believes strongly that education in general and childcare in particular are entering a “new normal”.  What this means is that many of the common practices in place before COVID-19 will need to be replaced with practices better suited to current challenges.

 

One of the first things that we think the student will change is the check-in process.

 

In the pre-COVID era, the process typically involved a parent entering a common space like a lobby, interacting with a fingerprint scanner to authenticate themselves, and then handing off a child to a staff member.

 

Before COVID, Smartcare modernized this process with the use of touchless QR codes, and while removing a fingerprint scanner dramatically reduces contact points, we think the process can be better.

 

We think the best practice in the new normal will look something like this:

 

  • Families will queue in socially distanced location such as the family’s car in a drop-off line in front of the school.
  • Either the parent or the student’s teacher will complete a pre-drop-off health-check. The CDC has provided guidance and we anticipate that guidance will evolve over time.  At this time, those guidelines include:
    • Temperature checks for fevers over 100.4 degrees.
    • Signs of illness including coughing, shortness of breath, difficulty breathing, fatigue, extreme fussiness, nausea
  • Technology can automate validating the health-check to ensure it meets regulatory requirements and the school’s own preferences. A child who poses a risk to others never enters the facility, and so that staff and parents have the peace of mind that their child is a in a safe environment.
  • The student’s teacher can take custody of the child in a well-ventilated, socially-separated space such as directly from the child’s car in a drop-off line, and escort the child directly to a classroom. From here, the child will stay with classmates and remain isolated from other classes in the school, minimizing contact points along the way. This ensures separation from other students in other classes.
  • Within a school, classes should be kept as separate as possible. Where common areas must be shared, to the extent possible, those areas should be used by only one class at a time and disinfected between uses.  All areas and toys should be disinfected regularly.

 

Where the above procedure isn’t possible, we recommend the use of personal protective equipment (PPE) and barriers to minimize the exposure to staff and families.

 

Smartcare has functionality to support the new normal in your center and our team of customer success managers can help you update your procedures for the new normal.  We have a report to help you track health checks and our teacher app allows for touchless check-in wherever its best suited for you to do so.  You should expect improvements from us over the summer as we get more feedback.

 

We are committed to be your technology partner as we navigate into the new normal together.

 

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