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Best Financial Practices for Child Care Providers!


Here at Enrolmy, we work with hundreds of childcare operators and activity providers around New Zealand and Australia. In fact, the founding CEO of Enrolmy, Dean Pendergrast, successfully grew his own music school, Musiq Hub, to host 5000 students around the country. Enrolmy's Board of Directors have a great understanding of what small-large operations need to manage and grow their programmes, while are also being very aware of parents' perspective in and around the childcare and activities industry. Along with our well experienced team - we work closely with large corporations like Xero and Stripe - on accounting solutions. Together we have formulated the BEST practices for operators in the childcare field. The Enrolmy processes are built on research, data, development, experience and flows that lead to administration teams having their tasks made simple, online bookings made, and parents left happy!


Barriers to having the best practice in your business


The biggest barrier we see providers challenged with to implementing BEST practices in their business - are key persons stuck in a "This is how we've always done things" mindset. Often this has been the hold up when organisations are looking to shift their systems or processes. To implement best practices, organisations must stamp out this negative mindset around change. Bear in mind that changes don't always need to be massive, and not all shifts will have ripple effects on the business. Nonetheless...


As Henry Ford, Albert Einstein and Tony Robbins once said....



Best practices with Enrolmy.


Get your processes systemized


Have a website and online booking platform. The world is on the internet. We recommend using Enrolmy as your software choice. Why? Because we've seen too many a provider who are overwhelmed, stressed and cannot handle the logistics of their business. When we've taken a look at their processes - their time is usually filled up with manually logging information into cloud-based systems, paper forms, lost communications, chasing people up for money and often using unorthodox ways of dealing with payments and discounts. All of this equates in a poor work/life balance, stress, and even sometimes running at a loss or debt. But Enrolmy gives providers the tools, training and support when dealing with their operations. Staff have simplified their administration flows, communications are easily tracked, and accounting matters are streamlined through a simple Xero sync and the ability to take credit card payments. It's an all-encompassing software designed to correctly handle the daily operations of an activity and child care provider. As I mentioned before, the software has been developed to intrinsically include the best practices in terms of online booking flows, operational flows and accounting flows. Below are some of these true and correct flows.


Invoicing processes for different types of providers.


We are well aware that each and every provider invoices very differently - sometimes this is based on the community around the organisation, or the level of familiarity the accountant has with various styles of invoicing, sometimes accountants are forced to create weird and whacky ways of invoicing due to operator demands or parent complaints. Here's our take on invoicing for certain providers - and how it works.


Before & After School Care Providers (BASC)


Invoicing in arrears is the way to go. It keeps tracking and marrying invoice codes and credit notes, clean and simple. Invoices are created based on what has actually been attended. There is no need to track booking changes and no need to credit for a change of booking, for example. As BASC typically runs for a full year, trying to keep track of booking changes when invoicing in advance has proven to be a logistic nightmare. We understand that the nuance with invoicing in arrears leaves providers with having much greater upfront costs. There's the need to pay staff, venue hire, etc. - before the receiving of any money. BUT at the end of the year, providers should have a greater surplus which can be the seed money for the following year. The benefits of an extremely simple invoicing regime, with no need to track booking changes and no need to reissue or modify invoices... means that the administration's simplicity outweighs the temporary financial burden.


Some providers like to ask for an upfront deposit from their parents to help offset this upfront cost. This can work well, but again there is a risk of creating further administration headaches. We have seen some providers who ask for deposits on a weekly basis and invoice on a weekly bases. This is the administrative equivalent of creating two invoices a week, and then trying to manage the payments. This is nonsensical from an admin point of view. A better way to operate is to ask for a one-off deposit at the beginning of the year of TWO weeks or more. Then invoice weekly. That way a block of money to run the programme is received upfront and providers can settle into the simplicity of invoicing weekly or fortnightly after that.


Managing finances in arrears also makes sense from an OSCAR subsidy point of view. The OSCAR rates are typically received at the end of each week. By invoicing in arrears, the correct rate can be checked / inputted before invoices are created and the rate can be shown on the invoice. This gives full clarity to parents as to what portion is paid by the subsidy and removes any faffing about with charging parents for the full activity and then having to apply credits for the subsidies.


Holiday Programmes (HP)


Holiday programmes usually conclude after two weeks which means the accounting flows for this activity can be much simpler than before and after school care programmes. However we have encountered many a provider or two that have managed to complicate this seemingly simple invoicing process. The only time we've ever had providers come to us with messy invoicing issues around their HP, have been due to the organisation invoicing the two week activity in arrears. Off hand it seems sensical to invoice this way, as managers reconcile the attendees with the bookings, track the changes and modifications that parents make along the two weeks and then send out the final record of what needs to be paid for. But more often than not - these providers have been left chasing up money - well after the HP has run it's course and causes an administration nightmare. Especially when some of the outgoing costs to HP excursion providers are reliant on the payment from parents. The tracking of changes to bookings has also proven to be a large headache for some cases that we've dealt with. We recommend that best practice for HP is to invoice in advance. Most organisations should demand payment before the programme commences. Even a part-payment or deposit would do for those businesses that feel they should be lenient. This increases cash-flow throughout the year - streamlines accounting flows and rules out chasing up money. This is then simply followed up with a second invoice at the end of the programme - reconciling any changes made or detailing any credit notes that will be applied to the parent. The provider can then fully conclude the HP and move on to their next activity.


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