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Parents not paying.....


emasi8624
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Hi there,

 

I am new to this so hello everyone :)

 

I was hoping to get some advice...... We are a new nursery whon opened in March 2013. We currently have 10 children on register.

 

We have a couple of parents who have not been keeping up with their nursery fees. We are now approaching the 3rd week in August and a couple have over £200 outstanding from July. Despite me sending out invoices, reminders, having conversations, it just seems to be excuse after excuse. I know these parents receive tax credits on a weekly basis to help with their childcare and its very frustrating. One has been with us from the beginning and started to fall into arrears the previous month.She will occasinally make a random payment that did not cover the fees, then it just keeps building up, The worst part about it is she will come in to nursery telling the staff about how she has been clothes shopping, got her hair and nails done and how she goes out for meals every night!!!

 

The tricky situation I am in is because we are new and we tend to only have 5 or 6 children in a per day, it is not costing extra in staff for the children to be in as we are more than meeting our ratios with the 2 staff members, and until we get busier in Sept we cannot really afford to suspend their nursery place until payment is brought up to date as then we would lose out. We are getting some payments, its not that they are not paying at all. I am willing to work with parents who are genuninely struggling, but I do get the impression that this is not the case, and at the end of the day I have my bills, rent and staff to pay!

 

I was wondering how other nurseries deal with this kind of non-payment/falling behind on fees?? And what are your opinions on adding interest to the outstanding fees if not brought up to date after the 2nd week as a deterant from falling behind?

 

Thanks :)

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I think you simply have to be blunt with parents who happily tell you about the hair/nails/threeholidaysayear/new car/designer clothes etc. Tell them YOU would love to indulge yourself too, but as they haven't paid their fees, you can't! I know you're new, but if word gets round that you are a soft touch when it comes to fees, you will rapidly become a former setting........you will simply go out of business.:you say you can't afford to suspend their place until September.........but if they aren't paying, then you can't afford to keep them at all! I would add a late fee...mine is £25 or 10% of the outstanding bill, whichever is greater. I would also bite the bullet and say that until fees are up to date, then you cannot accept the child into the setting any longer. Many groups will add £5 to the bill if overdue, but honestly, what's a fiver nowadays, especially on a bill that is £200? It has to be enough to be a deterrent. I will always.......always..... listen to cases of genuine hardship ( and have waived fees where I know for sure that there is a real issue), but be sure that they aren't spinning you a line. You could always point out that HMRC will phone settings to ensure the child is attending...........I had them call me just this week about a child.

 

I'd write to them again, giving them a date by which their fees MUST be brought up to date..say, 31st August and send the letter recorded delivery so they have to sign for it and you know they have received it. It will concentrate their minds knowing that you are taking this seriously! Good luck

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I agree with what Narnia has said and will actually have to think about the late fee addition to our payment policy myself!!

 

We have had 2 long overdue bill battles but I was lucky that as part of the school we could use county to send out letters that meant if bill not paid the issue went to court.

I have to say I tried all sorts myself before resorting to this but eventually there was no more I could do.

 

In a couple of other cases I have stopped attendance of the child to extra nursery sessions (above their 15 hour entitlement) and their attendance at after school club. This worked well but I appreciate with low numbers its a big decision to make. However if you're not being paid is losing the child a loss anyhow?

 

Good luck. I hate the money chasing aspect of this job and so I try to be very specific with parents about what we expect!

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Hi, welcome to the forum :D:D

I think we've all been in your position.

Our policy clearly states that payments not received two weeks after the invoices have been sent out may result in the childs place being withdrawn.

We stick to it now after two families left us with over £300 debt, even stopped one on the way in to say last weeks letter had warned the place would be suspended. We simply cant afford for payments not to be made..

You need to remember, you are a business, you have overheads and your first responsibility is to your staff.

Get tough, review your policy and nip this in the bud.

 

I always liken it to Sainsburys to Tesco, we dont go there and tell them we'll pay next week, next month, this is the same, you are providing a service and should be paid for it.

 

Having said that we're like Narnia, any genuine financial hardship and we'll help :1b

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Ditto all of the above posts - although I might be inclined to turn the HMRC line suggested by Narnia a bit and suggest that you have a duty to inform HMRC if tax credits for child care are not being used to pay the child's fees!!

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Hi and welcome,

I think this is an issue with us all and we can all sympathise with you. Check your fees policy and follow it, give parents with outstanding fees a copy of it with a letter requesting payment by a certain date. If payment is not forthcoming then inform them of the next step e.g reclaiming through the small claims court ( if this is in your policy, if not then it probably needs reviewing). I agree it is hard to turn children away as I always think that as long as they are attending then I stand more chance of getting back pay than if the parent/child just disappear from the setting but there has to come a point when you need to make a stand. Have you tried discussing a payment plan or a monthly direct debit option? I have found asking for the money when there are other parents around like at the beginning of a session can guilt trip them into paying up. My letter requesting payment also always states that I will be passing their name onto other local settings as I have parents in the past who go from setting to setting building up debts and then doing a bunk. Our local cluster group now pass this info on to each other so that each setting can make an informed decsion when taking on a known bad paying family. I had a family in May who came to me owing over a thousand pounds to another setting and we set up a direct debit payment plan from the start and so far my invoices are being paid and the family are not able to be in arrears with me. I hope you sort this out amicably and that the child can stay, it is not the childs fault after all, let us know how it goes

Edited by max321
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Thank you everyone for your supportive advice.

 

Yes I think sending out a copy of the payment policy along with the invoice is a good idea. I will amend my policy to include the late payment charge and also a section informing them that we will be contacting HMRC regarding the tax credits - i think the treat of this interupting their payments from tax credits will work as a good deterent.

 

I managed a nursery for 3 years prior to opening my own and this is definately my least favourite part of the job. However, this nursery was full with a waiting list so suspension of places or threat of losing the place was not an issue. And like you say, it is a hard decision to suspend places when we do not have many children as it is, as there is then no chance of getting the money. Especially since one of them is full time so we would lose out on £175 a week alone from that child. They do pay, just not enough to pay off the arrears and also seem to 'forget' that it adds up again the following week. At the moment it just seems to be random payments here and there, and these tend to be on a friday with the promise of resolving it on monday, which is then met with the promise of paying when tax credits pay them on a thursday, and so the cycle continues.....

 

It is certainly a lesson learned and I want to nip this in the bud before the large intake in september when the nursery will be almost full. I will certainly ensure I am firm and 'lay down the law' from the point of registration and provide the parents with a seperate payment policy along with their usual contract to reinforce this.

 

Thanks again for your help, I will let you know how I get on...... fingers crossed!!

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Guest sn0wdr0p

Well this morning my husband had left an answerphone message for a parent who I have sent countless invoices to (her boys attend my OOS club and haven't been in during the holidays and £400 is outstanding from June) and threatened informing tax credits on top of my usual debt collectors threat. She has just sent him a text message saying she will do a bank transfer on Wednesday. He got another parent to pay up last week who hadn't paid since April by using the tax credit threat. This seems to work better than anything else.

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Hope you don't mind me jumping on this topic. We are having trouble with one parent. The child's attendance has been sporadic to say the least and so she has built up a bill with us. Now the child is due to leave us at the end of August for school and she has not brought him into pre-school once since the holidays began! She assured me that a standing order had been set up for weekly amounts to be paid up by the end of August. Surprise, surprise, no sign of payment and we are now half way through the holidays. I have tried calling her, left messages and she now just cuts me off. I will be sending a letter to her today explaining that the payment must be made within 7 days and will add an admin charge also as per our policy. However, I was just wondering how we go about recovering the costs if she pays no attention to my letters. I have never come across this before so it's all a bit new (and daunting!) to me. Do we have to go through small claims court or are there other avenues?

 

TIA

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we too have a parent who owes from last year ( lunch clubs) - we tried to help her and suggested small payments each week of a couple of quid - she still has not paid and the youngest child is on funding but we do not allow him to attend any extra unfunded sessions. i have called her and she said this week Tues/Thurs to pay it . I think what is annoying me now is that although she is a single parent with 3 children , she spends everyday going to town shopping and then I see her out and about in the village at pub spending.

I tried to be really understanding , having been a single mum myself but its her lack of values that annoys me , no matter how tight things were I never allowed myself to get in debt and would certainly not have considered openly spending if i owed money .

 

the problem of living in a small community !! Tomorrow is Thursday - if she had taken advice, debt would have been paid off by now !!It was fortunately nowhere near what some of you are owed

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I sent out a new payment policy to all parents and it has definately helped! I think the treat to inform tax credits was definately the main factor. I have since had 2 out of 3 parents pay the majority of their balance and made payment arrangements for the rest. I have will try to uplaod the policy.... I sent it out in an envelope with a post it note inside saying "Each time we introduce a new policy we send out a copy to all parents. Please find enclosed our new payment policy which is effective immediately". I will now also print it out and attach it to each invoice that I have to send out for unpaid fees as a reminder. I decided to request fees on a weekly basis as this avoids them building up and stops anyone using our service for more than 2 weeks and not paying. Only in circumstances where the parent sets up a standing order with us will I accept monthly payments and if the standing order is cancelled they will immediately go back to weekly payments. We are not in an affluent area of the city so I find that this works best for us and will hopefully prevent build up of unpaid fees. I am eager to get this sorted by September and the last thing I want as a new nursery is to get a reputation for being easy on non-payment.

fees policy (forum).docx

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Guest sn0wdr0p

Well I am pleased to say that the outstanding £400 has been transfered to my account so without doubt I am going to continue with the tax credit approach.

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