Debt Collection for Children’s Nurseries
The childcare industry in the UK is a sector that experiences a higher than average issue with non-paying clients. Many nursery managers cite awkwardness as a major problem when broaching the subject with debtor parents who don’t see the outstanding monies as a major priority in their lives.
If a service has been provided by a nursery that they haven’t been paid for, then what leverage do they have on the parent to ensure they get paid? A garage can keep a car that they have not been paid to fix, but obviously a nursery cannot keep a child until they have received the outstanding funds.
As government childcare assistance in the form of tax credits – paying for 75% of working families’ childcare costs – are paid straight to the parents instead of to the provider, people have the opportunity to prioritise their own needs, which tends to leave paying the nursery quite a way down the list. Money intended to help pay for childcare simply ends up paying for other ‘more important’ financial obligations.
What to Do About It?
As financial pressures pull on us all, for a nursery to survive, it needs to get ‘tough’ with non paying clients.
The following invoicing and payment amendments can be made to greatly improve cash flow:Charge fees monthly in advance – removing the need for chasing later
- Employ a ‘staged’ reminder policy to gently parents of their obligation to pay
- After a set period (perhaps 2 weeks), refuse entry to the nursery for that child
- Suggest a payment arrangement to parents experiencing financial difficulties
Whilst tackling the thorny issue of outstanding balances with parents is never easy, you should never let it persist long enough for it threatens your sustainability. Read our top tips for chasing unpaid childcare fees.
Debt Collection Assistance
When all diplomatic methods have drawn a blank and you’re left staring at what looks like an irretrievable debt, you should not discount the option of a professional debt collection agency. Their professional and friendly approach will achieve 2 things:
1 – It lets your debtor know that you are serious about being paid
2 – It takes the stress from your shoulders and allows you concentrate on your business
A modern day specialist debt collection agency will act on your behalf and you don’t need to worry about methods used to achieve a result, as a reputable firm would not do anything unlawful or act in a unprofessional manner. Tarnishing the reputation of your nursery is in nobody’s best interest. In addition, debt collection firms tend to charge on a ‘no result no fee’ basis, so the process shouldn’t leave a big hole in the money you’re owed.
When all is said and done, you need to act when you have a non paying parent, as failure to do so only leads one in direction. That direction is downwards towards a scenario where you can’t pay your own bills and you’ll not get the kind of leeway you might be giving to your debtors.
Just adjust a few of your operating methods and that should be future that you don’t ever have to face.