Does anyone one 'average' out fees for parents?

[Kes74]

Hi...one of my parents has recently increased her hours with me and has asked if it would be possible to average out her fees over the year. I can see how she would benefit from this, but
Worried it could be complicated for me! She has Been my most reliable family and they are lovely. My normal system means that parents are invoiced monthly and in advance. Does anyone else 'average' fees over a year? x

[EmmaReed84]

I do and I personally prefer it.

With one client, I know I will only have her child for 50 weeks as she is leaving in August 2014. So I worked out her weekly fee, then multiplied it by 46 weeks (I deducted my unpaid 4 weeks holiday) I then divided it by 12 so both the parent and myself know exactly what is owed each month, the only time the fee changes is when I have time off and I deduct the relevant amount of hours.

With my two other parents, they are TTO, so I have multiplied their weekly fee by 39 term time weeks, divided it by 12. If I take holiday during term time, I reduce their invoice accordingly.

I find this helps me a lot as although I do not charge for my holiday, I am still paid a regular amount each month.

[amanda1309]

I average my fees out for all my parents.

I know what's coming in every month and they know what's going out.

[Kiddleywinks]

It does make life easier for parents to budget, and for me too.
I keep track of what has been paid versus what should have been paid, on a spreadsheet, as a parent leaving before the end of the 12 month cycle could under or over pay by a considerable amount.

[mum2two]

I do this too. Used to do monthly invoices, but if we were off for 2 weeks, income was half the amount! My bills were still the same! Also varies holidays etc, so instead if parents now getting a huge bill in Aug, I work it out over 48 weeks (or 12 holidays & 36 term time weeks if a schoolie)

Works well for us & parents as we get the same amount every month & parent knows what they've got going on.

[yummyripples]

It's fine unless they leave in a different month to when they started. I had one start in October one yr and finish in July a few years later. Outstanding amount was over £200. I couldn't make the parents understand and they wouldn't pay. I should have took it further to get the money back but because I was minding children from their extended family I didn't. Live and learn x

[Chatterbox Childcare]

I do and prefer it - know what is coming in and what is going out each month.

a word of warning - I know of others who have been caught and on my contracts it states under additional information "this contract runs from 1st September each year until 31st August the following year. Should the contract finish before 31st August then fees may be recalculated based on monies paid and time used". Parents have to initial this change.

[helendee]

At the risk of sounding a little thick :blush:, what happens if a parent leaves before they have completed a full year with you?

Wouldn't you potentially lose out then?

[funemnx]

When I've done this in the past, I've put a rolling balance on the invoice (I keep a carbon copy in their folder). If the parent leaves at any time, I always know exactly what the balance is and so do they :thumbsup:

[bindy]

Personally I would not do it. I charge monthly fees if I take holidays one month I just deduct the amount. I have been burnt in the past, I could not get parents to pay what the owed me and so put it down to experience. Its fine if they stay for a full year for sure but one never knows in this job! I could not be bothered at the time to go to small claims, ( even though have done it since over payment and won) just had my baby, who had health problems. Would not do it again, would rather save myself for less money when I take holidays, I am in control!

[Mummits]

I charge all my parents averaged out amounts per month, payable in advance. I also state on my invoices that this is an average monthy amount and that there may be money refundable or payable if the childcare arrangement ends other than at the end of the year. I also hold a payment deposit of one month's fees refundable at the end of the contract minus any fees owed. In practice they are never as much as a month out, so that covers me. The last one who left was only 50p off the amount they had paid = it was hardly worth the effort of working it out.

[Kiddleywinks]

At the risk of sounding a little thick :blush:, what happens if a parent leaves before they have completed a full year with you?

Wouldn't you potentially lose out then?

No, because you keep a note of hours used to date, fees paid to date, and the current balance.
eg:

Parent wants fees averaged out, so has been paying £30 per week for 10 weeks. You have received £300
However, care provided so far should have been £40 per week so there is still a shortfall of £100 owing to you should parent leave before the period is finished.

This shows on your invoice:
Outstanding balance from X month: £60.00

Payments received during X month:
x date £30.00
x date £30.00
x date £30.00
x date £30.00

Fees due for x month
week 1 £40.00
week 2 £40.00
week 3 £40.00
week 4 £40.00

Balance due: £100.00

Balance due Figure in red is a debit (money owed by parents), and in black is a credit (money you would owe parent)


What then happens is holidays.
If you don't charge for your holidays, but parents still pay you (because they've averaged it out to pay weekly) that payment reduces the balance owed
so using the example above
Balance owed now is £100.00
Parent pays you 4 weeks @ £30.00 (putting them £20 in credit)
You have 2 weeks unpaid holiday and 2 paid weeks of care = £80.00 (debit)
Balance due is £60