Debt Collection for Childrens NurseriesLast modified: November 20, 2023
Debt Collection for Childrens Nurseries
The childcare industry in the UK is one of the most vital for parents and guardians across the country. With their services in high demand, the sector experiences a higher-than-average issue with non-paying parents.
With this in mind, nurseries must get paid for the childcare services that they provide. Many nursery managers are hesitant to approach customers about issues relating to non-payment. When asked why most managers replied that they felt too awkward to chase payment.
Many parents that owe money to a nursery don’t see it as a problem, with the outstanding fees having a low priority in their lives. Many nurseries feel like they have no leverage to weigh against those who do not pay.
For example, if a parent uses the services of a nursery for a few months and then does not pay for it, the nursery will forbid them from coming therein. At this point, the parent may send their child to another nursery and repeat the cycle.
How does a nursery ensure that they will get paid?
Maintaining and running a nursery is very expensive, and you need a steady cash flow to deliver your services. It is clear that nursery managers need a solution, and they are often unsure of who to turn to for help.
In this article, our debt collection experts explain what the options are for all matters relating to debt collection for childrens nurseries.
Debt Collection for Childrens Nurseries – Factors
The UK government provides childcare assistance in the form of tax credits. This pays for 75% of working families’ childcare costs and is paid directly to the parents instead of to those who provide childcare services.
Whilst this is an excellent program and a lifeline for many, some people choose to use it for their own needs instead. This has the unfortunate side-effect of paying for nursery fees far down their lists.
Money intended to help pay for childcare ends up paying for other “more important” financial obligations.
Debt Collection for Childrens Nurseries – What to Do About It?
Financial pressures will always factor into any decision making process. As mentioned, a nursery is like any other business in the sense that it relies on its customers to pay to continue normal operations.
If someone puts this at risk by not paying, the entire nursery and all the families who attend it will also be vulnerable. With this in mind, it is appropriate and necessary to get ‘tough’ with non-paying parents.
Understandably, many nursery managers do not wish to challenge parents about an issue with payments. The best way you can deal with debt is to prevent it from occurring in the first place.
You can make the following invoicing and payment measures to help improve your nursery’s cash flow.
Charge Monthly Fees in Advance
This is an excellent measure, as parents must pay for the month ahead instead of the month which has passed. This removes the need for chasing later. With this method, many parents will challenge you, but it is important to stick to the principles.
If some parents are adamant that they will not pay a month in advance, it could be a sign that they did not intend to pay at all.
Regular Payment Reminders
Setting up regular gentle reminders prompting parents to remember their obligation to pay, this is a good way in which to reduce the risk of non-payment childcare fees. If late payment reminders are ignored, a letter before action may need to be sent.
Refusal of Entry
In the worst cases where parents have not paid you for your nursery’s services, it is acceptable to refuse them entry. Setting a reasonable window for payment (for example, 2 weeks) is appropriate, as this will give the parents time to pay.
There are many reasons for parents to withhold payments, but not all are unfair. For example, a parent may be struggling to make ends meet, and may be unable to afford childcare.
They may not tell you this unless spoken to first as it may be quite an embarrassing subject and nobody wants to put pressure on those already struggling. If a parent is experiencing financial difficulties it could be worth considering a payment plan.
Debt Collection for Childrens Nurseries – Assistance
The subject of outstanding balances is a thorny issue. Speaking to parents about this is never easy, but you should never let it persist for any lengthy period of time. If it goes on for too long, it may affect your sustainability and put the whole nursery at risk.
For help with dealing with this, read our top tips for chasing unpaid childcare fees.
Debt Collection Assistance
Despite any preventative measure, there will always be those people who refuse to pay. When you have exhausted every option and someone still owes you money, it is time to escalate the matter.
There are various options for this, but the best by far is to use a professional debt collection for childrens nurseries solution. Modern debt collection agencies provide a service that is both professional and friendly.
This approach achieves 2 things:
- It lets your debtor know that you are serious about them paying
- It takes the stress away from your shoulders and allows you to concentrate on your business
There are many agencies, and some specialise in particular industry sectors. For example, Frontline Collections specialises in all industrial industries including dealing with unpaid nursery fees.
A specialist debt collection agency will act on your behalf, ensuring that they recover the debt appropriately. Frontline Collections are accredited by the Credit Services Association (CSA).This means that you won’t need to worry about the methods used to achieve a result.
When considering a debt collection agency, the reputation of your nursery must not be jeopardised. A reputable company that provides debt collection for childrens nurseries would not do anything unprofessional or unlawful.
Frontline Collections operates on a “no result, no fee” basis.
If the debt cannot be recovered, you will not be left with a hole in the money that you are owed. When you have a parent who is refusing to pay, you must act. Failure to do so will only invite more people to do the same and put the nursery at risk.
You should not allow yourself to be in a situation where you cannot pay your bills. Often, adjusting a few of your operating methods should protect you from a future you do not want to face.
If you are facing any issue with non-paying parents, you should consider the best debt collection agency for childrens nurseries. We collect thousands in unpaid childcare fees every week.
Speak to our friendly experts today or try our online chat facility for immediate help.