Charging a flat monthly fee

[smurfette]

Hi all

I charge by the hour and feel my hourly rate is a bit low with the service I offer and the expenses I occur. I want to put up my rate a small bit as I have a space coming up, and one of my families has been with me since I started up four years ago with no price increase. This evening I had a chat online with another minder who charges a flat rate each month including bank holidays including December but she didn't explain what happened for her own holidays

I am tempted by this idea even though I charge for bank holidays and have never had an issue with it (I close) I would like to incorporate my own holidays into it somehow as I always feel I can't take time off as I don't get paid and we depend on my wages

Anyone here do this and how do your own holidays work? I know if they leave partway through a month it may be messy but if anyone could advise I would appreciate
It! How exactly does it work?!

[natlou82]

I have a couple of families that pay an averaged out fee. This is helpful to them as there are no extreme fluctuations in their monthly payment and good for me as I don't get a drop in income at holiday time as I still get paid the same. I am very organised and usually know all of my holiday dates in advance (I know up to 31/8/16) at this moment lol! With this in mind I can work out exactly how much is due from the family each month for a year then divide by 12. You would need to keep a running tally. I printed off a table which shows how much is owed each month and then the new monthly figure and also showed the holidays included (I also give my families some unpaid holiday). This will be helpful if they did decide to leave or alter their hours as I can easily work out how much is owed for a specific period and how much has been paid. It is a bit more in depth than my usual payment methods but I see the benefits so don't mind :-)

[smurfette]

I have a couple of families that pay an averaged out fee. This is helpful to them as there are no extreme fluctuations in their monthly payment and good for me as I don't get a drop in income at holiday time as I still get paid the same. I am very organised and usually know all of my holiday dates in advance (I know up to 31/8/16) at this moment lol! With this in mind I can work out exactly how much is due from the family each month for a year then divide by 12. You would need to keep a running tally. I printed off a table which shows how much is owed each month and then the new monthly figure and also showed the holidays included (I also give my families some unpaid holiday). This will be helpful if they did decide to leave or alter their hours as I can easily work out how much is owed for a specific period and how much has been paid. It is a bit more in depth than my usual payment methods but I see the benefits so don't mind :-)

Hmm change in hours would be ok I think because I was thinking of saying this is my monthly rate for one day a week, two days a week etc, rather than averaging out if you know what I mean,, so could I say to parents 'this is my monthly charge, I am closed for four weeks a year, will refund x amount per day if I am off sick, or if you leave mid month' (suppose this would be an average daily amount taking into account some months are four and some five weeks) does that make sense?!

[lollipop kid]

Hmm change in hours would be ok I think because I was thinking of saying this is my monthly rate for one day a week, two days a week etc, rather than averaging out if you know what I mean,, so could I say to parents 'this is my monthly charge, I am closed for four weeks a year, will refund x amount per day if I am off sick, or if you leave mid month' (suppose this would be an average daily amount taking into account some months are four and some five weeks) does that make sense?!

There are 12 months in a year, but 4 weeks in most months, so the risk is that you'll end up with 12 payments (equivalent to 48 weeks of care). Or you could take an amount x 52 divided by 12.

I used to try to bill parents monthly, but I found that if a parent left midway through the year, it was just a nightmare trying to reconcile what they had paid against what was owing. I recall one parent telling me that they had paid me what I had asked for (the averaged monthly payments) and it was just my own tough luck that it left me with a shortfall!! (And he was an accountant!!! :censored:)

I now use a system based on my PACEY attendance sheets. Basically, for this month, my weeks are: w/c 4th, 11th, 18th and 25th May. I get paid in advance, so the payment day for this month was Friday 30th April (or Thursday 29th or Wednesday 28th, depending on when parents' last day with me was). So parents paid their weekly amount x 4.

June is a 5 week month (to cover w/c 1st, 8th, 15th, 22nd and 29th) so parents' payment date will be Friday 29th May (or the preceding Thursday or Wednesday, as above).

I only give my parents two or three invoices each year. They each have the next however-many payment days on there, together with a breakdown by week for that particular month (as each month's payment varies).

I find this method to work accurately for me, as even for those who leave part way through the year, I know they have covered all of the weeks of care that they have had up to their leaving date. Some parents prefer to pay me every 4 weeks, so I just amend their invoice dates to work 4-weekly. Some want to pay on 20th month, so again, I amend my payment dates to try to hit these. I just keep a copy of their most recent invoice in my file, which shows the payment dates, then I 'tick' off their payments in my attendance register (using little boxes at the bottom of each week on the attendance register). I draw a line after the 4th week or the 5th week to tally with my invoice, then I always know where the parent has paid up to.

It's not a very high tech way of working, but it works fine. I also run a payment reconciliation sheet (just for me), as I then record the actual dates that funds reached my account (and match this against the payment date in case of late fees). Surprisingly, my parents all pay on time (even with vouchers as they have got into the habit of activating vouchers on Mondays to hit my account for the end of that week where due).

Hope it doesn't sound too complicated. I've done it that way for years now, and I never have to worry about being out of pocket.

You also asked about holidays. I look at the dates when my local school is closed (the one that I cover). I then choose 5 weeks' holidays to coincide with the school holiday dates. I list these out, plus the Public holiday dates, and email them to my parents at the beginning of January each year (or just before the Christmas holidays) for the full year ahead. This way, parents co-ordinate their days off with mine so are never in the position of having to pay for childcare while I"m on leave (as they would do if they took holiday at different dates from mine). My leave is paid at full fee by the parents. (Parents also get paid for their time off by their employers, so it works out fine for both sides, and each side gets a much needed break and time to spend with their own children.)

I mark holiday weeks on the attendance register, so that parents can see at a glance which weeks are holiday and which ones not. Then if parents need to take any leave on top of these 5 weeks, they pay full fee as well for these (rarely happens with my parents, though). Similarly, if it's a retainer week(s), I also show this on the attendance register.

I hope this helps.

L

[natlou82]

Hmm change in hours would be ok I think because I was thinking of saying this is my monthly rate for one day a week, two days a week etc, rather than averaging out if you know what I mean,, so could I say to parents 'this is my monthly charge, I am closed for four weeks a year, will refund x amount per day if I am off sick, or if you leave mid month' (suppose this would be an average daily amount taking into account some months are four and some five weeks) does that make sense?!

I think you would be ok with this as long as you work out your paid weeks as an annual figure then divide by 12. The reason why I go into so much depth with mine is so it looks transparent the clients can clearly see that overall they aren't paying for my holidays etc.