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Parents paying by direct debit


Guest sn0wdr0p
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Guest sn0wdr0p

Here I am at the end of the month again with not enough money in the bank to pay the staff and having to dip once again into my substantial overdraft - I have on occasions had to go over it so my husband has lent me the extra to pay them all.

There should be enough money but once again a large amount of parents have not paid. 10% of our annual income is outstanding -I am sick of the excuses - I have to live as well - and enough is enough. I have been off sick for the last seven weeks and some parents are taking the p in my absence.

Currently parents pay by cash or bank transfer if they do online banking and are supposed to pay monthly in advance. I have now decided to move over to direct debit payments where I have control. I had thought that I will invoice parents on the 1st of the month and take the payment out seven days later allowing them time to approach me if they have any queries on their invoice. I realise that there will be some issues to overcome with parents who do shift work who do not use the same number of sessions each month or only use us in term time and I will meet with them to look at an average cost.

I intend to send out a letter next week explaining my reasons for the change and a direct debit form for them to complete. I really have to get tough - aged debt over the five years since I opened is £9000.00 - a substantial sum for this small nursery.

I would welcome your thoughts and advice. Do any of you take payments via direct debit? How does it work for you. Have any of you changed to this method and how did it go down with your parents?

Next thing to tackle - Hull City Council who owe me for a one to one support worker and still have 4 months pay outstanding - I pay the staff member then they reimburse me ! and the also many months fees for a fostered child who attends. Their procurement system is dreadful and we are passed from pillar to post.

Luckily my local authority - East Riding of Yorkshire - are very good at paying funding for 2 & 3 year olds with a fantastic grant monitoring officer or I really would be in trouble.

 

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I don't have parents pay by DD they do a bank transfer instead. Payments can be made weekly, fortnightly, monthly, half termly or termly and must be paid in advance. If it is not paid by the due date (you have to check or some banks will text you to say you have received a payment) then I nag - One nag allowed per customer - if I have to nag a second time it comes with the warning that the place for the child will be re-let to someone else.

I have said it before on here somewhere but I have been tough this year and tell my parents that I use the Sainsbury's (other supermarkets may do) business methodology - You no pay - You no get. It's a hard line to take but my setting is a childcare and education business and like any other kind of business it must balance its books. Sometimes it is really hard to take the care and vocation out of the equation but care and vocation don't pay the bills.

I now have no bad debt as I won't let it run up any more - most of my families access the funded entitlement only and if necessary I will nag my LA too - I'm as popular as ditch water there I'm sure xDxD

Unfortunately with funding rates so very low there are no margins for bad debt and it is a rocky road that we walk down if we start robbing our personal finances to fund our pre-schools and nurseries - a personal opinion I know but subsidising the poor funding rates out of business takings is bad enough - subsidising them out of personal incomes is not something I would recommend.

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My parents may either pay by cash (I should be so lucky!), cheque, vouchers such as Edenred or Bank transfer......like SueJ - I have a very 'no nonsense' approach - I used to be a whole lot softer but experience has shown me that you cannot allow fees to 'build up' - all fees paid half-termly in advance - I will 'allow' that to be two installments if requested - this is one area that I really 'keep on top of' - we are a very small group with very limited funds.......

Good luck Sn0wdr0p :1b

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Ours pay online, no cash or cheques allowed! If they can't do online or telephone etc they can go into our bank and pay over counter. If they are late they get a letter with a date to pay by or an offer for a payment plan if exceptional circumstances. If they don't then pay we don't accept child (have never had to do this!) although we have had them just not come back with the child in which case they got taken to court - no messing!!! I invoice four monthly in advance so now they have an invoice for jan feb March and April. They then pay by 20th month eg the exact amount each month as varies with number of Mondays etc or the total invoice amount divided into 4 equal payments. It's always the same ones though that don't cough up! We try and encourage as many as possible too to do the childcare vouchers as they come direct and on time!

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Guest sn0wdr0p

I used to accept cheques but got sick of them bouncing and the bank charge a fortune for processing them.

At 3am this morning I woke my husband and told him I was closing at the end of this term as I had had enough (and in truth I have rather enjoyed being home for the last 7 weeks following an operation). He told me to shut up and we would talk in the morning! In the clear light of day we looked at the pros and cons and found we could talk ourselves into it and out of it - do I really want to give up as it's been a hard slog to get here and a massive intake of children over the last few months makes me feel more positive. He is lucky to have a pretty good accountant so we met with him this afternoon for impartial advice. It was his idea to go down the direct debit route and to also employ someone with sole responsibility for finance who does not have a personal relationship with parents so as to make it easier to 'nag' for payments. It all comes down to cash flow as most parents eventually pay up but not until after I have paid my staff. I had hoped that parents paying directly into the account would help but those persistant late payers continue to cause problems.

My wonderful husband is going to get one of his ladies from his finance department to come in at the beginning of each month for a full day then one half day each week to get on top of it all. I admit that I am not a businesswoman yes I am good at the management side of caring for the children etc. but financially absolutely rubbish - far far too soft.

DBS check for her tomorrow then hopefully she can start soon so we can implement all the changes for the start of the financial year.

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Hope it all sorts! It's our accountant that does the nagging! At the end of the month she tells me who hasn't paid and I say yep send a letter to the ones I want her to, this way they deal direct with her - we are too soft and had £14000 outstanding when she took on the extra of chasing the payments about a year ago ( I used to do it before but it's so worth the extra cost to get her to do) it's now down to about £4000 I think so that's progress. We have enough to do without chasing money!!!

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I have had to get tough on our parents - ironically the only non payer this term is a committee member!! - We have a non payment of fees policy and if they don't pay on time they get one warning and then a £10 fine for each additional warning. It makes me angry that parent's take advantage - I have also had to use my own money to pay wages, which is so wrong. I know it is hard but getting tough is the only way.

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Guest sn0wdr0p

Well for the first time ever I sent a text to all parents with money outstanding telling them to pay up by 6pm today or their child's place was at risk. My deputy has phoned to tell me that the phone at work has not stopped ringing. 2 parents have already paid directly into our account, 3 are coming in tonight to pay, one is popping to my house tomorrow and 3 more are paying on Monday and one by instalments over the next month. What a result - much better than the response to our monthly invoice. The bank balance is now in credit 'just'. Some have complained that I have not given them time to pay but seriously they have had a months notice and saw our point of view when spoken to. Obviously I did not expect them to get to us by tonight and am happy to wait until Monday but the threat was there and they responded as expected.

Meeting with the bank next week to sort out a much tougher approach. Feeling much happier now. Thanks for the support x

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Wow, well done.

We also have a policy whereby we tell parents their child's place is at risk. We have not had to use it yet, but we have 1 parent who still owes a small amount (£33.50) from last half term. We have been told on numerous occasions the money will be in the bank on Friday. It hasn't been yet. The child is now eligible for the 2 year old funding and we will be telling the parents on Monday that their child will have to miss the first 2 days after Easter to clear their debt! Hopefully the money will then come in by Thursday next week (our deadline for this half term's fees)

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Guest sn0wdr0p

I'm going to share the Sainsbury bit with my parents. Asda in this area though - Sainsbury's are too posh and are located on the more expensive side of the city.

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