Help with averaging out fees please :)

[Alice77]

Hi everyone,

I'm new to childminding (and to this forum!) and am having a bit of a confusing time working out fees. I have two sets of parents wanting care from 12th Jan, one TTO and another TT but with adhoc care in holidays which I will charge a half-fee retainer for. It's really important that I have a predictable monthly amount coming in at the moment so want to average out my fees - I was thinking of running them both until September when their care needs will change a bit due to moves up to Reception. My questions are....

Do I add up the weeks manually until the contract is to be renewed eg. 24wks @ £x (term-time) and 6wks @ 1/2 fee (holiday) and then work this out as a monthly fee? How would I work out the monthly fee?

What about the inclusion of INSETS? Should I add these in?

or the exclusion of my holidays - would I need to take these weeks off the total weeks included.

Sorry if this seems confusing, I have a feeling I'm making it more confusing than it needs to be!

If anyone has a really good formula they could share I'd be really grateful

Thanks

A x

[Zoomie]

I would just add up all the amounts due for all the weeks till you think the contract will change. Then divide this total, by the number of months between now and then.

I have the term dates from my school so know when the inset days are - this I can just add them into the above total.

Have I made sense / helped?

[Alice77]

I would just add up all the amounts due for all the weeks till you think the contract will change. Then divide this total, by the number of months between now and then.

I have the term dates from my school so know when the inset days are - this I can just add them into the above total.

Have I made sense / helped?

Thanks Zoomie, that's the sort of conclusion that I've come to I think! Just thinking too, would you think it would be best if I asked the parents to pay from the 12th Jan - 1st Feb as a bank transfer and then ask for the standing order to run from the 1st Feb? This way it would mean that the Sept payment would come out at the same time that the new contract started (1st Sept). Does that make sense or wouldn't it matter?

[bunyip]

Tbh, IIWY I'd first ask myself if averaging out the fees is really desirable. OK, I can see your point about wanting a predictable income but, in all honesty, self-employment just doesn't often work like that. Whatever you do is, at best, only predictable for the next 4 weeks - or whatever notice period you use. Peoples change their jobs or homes or their child's school or their minds that quickly these days.

For one thing, you may face resistance from a client if any of their initial bills work out more than what they'd have paid for the actual care provided IYSWIM. Also, if your finances are tight, the last thing you need is to be faced with giving a hefty refund to a client, should they give notice at a point where the averaged payment means they've overpaid. OTOH, do you want to put yourself at risk of an unpaid bill if they walk out on you at a point where the averaged fee paid is lagging behind your actual hours worked? What are you doing by way of deposit, etc. to protect yourself from a bad debt? It's your call: what sort of position do you want to put yourself in?

Also, it's a sad truth, but a lot of 'averaged fee' arrangements end in an argument when the arrangement comes to an end and the CM and client each come up with wildly different figures on who owes what to whom. I know a lot of members have done this sort of thing and it has worked well. But it doesn't work for everybody. No offence meant, but if you're finding it confusing now, it may not be for you.

[natlou82]

I do this for a couple of my parents mainly because they pay via work place vouchers so easier if it's a set amount. You have to be very prepared I personally do Sep-end of Aug to run alongside school term so now I would run it Feb-Sep. Work out term weeks, inset days (if you know them) and your holidays. And go from there, even with all this prep as Bunyip says people change their requirements etc and it can be a bit of a faff. I do an invoice of what is actually due that month and then put the averaged out amount on after, that way I can go through invoices and figure out who owes what if anyone did leave. It's working ok for me so far but I wouldn't want everyone to be on this system as monthly invoicing is so much easier.