Today, I’m going to be talking about financial management in your business.
Today, I’m going to give you an example of how to handle your payments in your childcare business, how to handle your contracts, and how to ask parents to come into the office, sit down, and go over your payment contract with them.
Here is the sample contract that is available on your Jumpstart Blueprint.
So I’m going to sit down and go over with you some things that I learned a long time ago in collections. I believe that how you start things, will determine how it will flow throughout the rest of the relationship.
So the key points I’m going to share with you today before I go into the contract, are very important. So write these down, because these were some of the collection systems that I learned as I was going through my process of working for others in learning business.
One of the key aspects that I learned in my journey is:
So those are just some key points that I want you to realize so that when you are going through this contract, it is very clear to you as well as to them. Now, I’m going to flow through my contract, and I’m going to show you how to flow.
So what that means is you’ll have to read your contract and become familiar with it and become so familiar with your contract that you are able to recite it back to parents without really looking at it. So when I do it I have my parents to follow me through the contract process and discuss each area with them.
One of the things that I do is whenever a client completes the package, the childcare package, I pull up the contract and I flip the contract towards them. When I flipped the contract towards them. I grabbed my pen and I went through sections such as this.
I said, “Miss Dobson, I just want you to know that today I need to go over the contract with you and that we’re clear about our financial terms, obligations, and expectations. Now if I say anything during this process, please be sure to let me know if I should stop and give you clarity and understanding about our process.
So the first section I want you to pay attention to is that you are hiring us to provide childcare services for a weekly fee. Your weekly fee is listed here at $100 per week. These childcare fees are required to be paid regardless if your child attended only for a day, or if they attended the whole week. We also have a registration fee of 65.
This is an annual fee that comes out every month and comes out every year, and we send out a 30-day notice. This is your registration fee. Can you initial here that you and I talked?”
So you have the parent initial, then you now say, “This is our policy for when payments are due, payments are due Monday before services begin, your weekly payments are made in advance, and partial payments are not accepted. Be sure that you have your weekly payment upon arrival whenever the child walks into the center to receive care. Again, it doesn’t matter if the child attends one day, misses a day, or misses the complete week. The weekly fee is still required to be settled. Can you sign here? And do you have any questions?”
“We do take payments on Monday. Do you have any questions about that? All right, again, the registration fee will be renewed every March and you will be expected to pay a registration fee. Especially if your child has been in the center for 60 days or more. Any questions about that? All right, thank you. Can you sign right there for me?”
“We do have a late payment process where if the payment walks into the office after 12 noon, that is our parents’ grace period, we understand that some parents are not able to come in with the cash in hand at times. So to accommodate our parents, there is a $25 fee for the grace period, as long as the payment is on Monday by the afternoon, then we will continue services. If not, we will discontinue service that afternoon. Are there any questions about that? Okay, please sign here.”
“Now this is how we accept payment, and this is our payment policy. We do accept cash, checks, and money orders. If you choose to use a debit card, it must be at least $100 for us to accept them. You can make your payment online, and this will happen once you’ve been with that organization for 30 days, we’ll show you how to set up your payment online. We can accept personal checks, but it must be after 30 days of being enrolled in our program, your name and address should be on it that’s the same on file. Any questions so far?”
“To continue on all tuition fees are the responsibility of the contract holder. Now, Ms. Dobson,
I know I don’t have to explain this to you. But just in case, I do need to say it so that all of our parents are on one accord. We deal a lot with single moms and dads, and so we have a lot of co-sharing of the responsibilities of having the payments made on time. Whoever is the person signing the contract, that’s the person that will hold them accountable for the weekly rate. We have had situations where parents may say, ‘Oh, he’s gonna come in and pay this afternoon.’ And then when we speak to the other parent, he says, ‘Well, I didn’t know I had to pay.’ So because we’re not in between any type of custodial agreements, we just expect that whoever signs our contract here in the parent signature section is the person responsible for the payment. Any questions about that?”
“Our academy does not accept partial payments. So in the event that you do not have your full payment, please notify me so that I’ll know in advance what I can do to assist you. You must pay your weekly rate on time without fail so that our budget in our systems can be met. Any questions so far?”
“Now I know this is something I don’t have to explain to you again, without saying but just so you know, all accounts that are past due are reported to our credit collection agency. Any questions about that? All right, please sign that for me.”
“We also have a withdrawal policy. It is our policy that you submit a two-week notice in writing. The notice is not effective just by verbally saying it. You may stop me at the front desk and tell me but what I would like for you to do is to request a withdrawal form from the front office or bring your withdrawal letter and we will accommodate your withdrawal letter. You are going to be responsible for your two weeks of service even though you are withdrawing any event that your withdrawal notices have not been received, you will be billed for those last two weeks, and you are expected to make your payment for those last two weeks. If payment is not received, we forward it over to the collection agency. Do you have any questions about that? If not, okay, sign there for me.”
“Any event that the check has been returned after processing, there will be a $50 late fee or a $50 late fee. Are there any questions about that? All right, sign here for me.”
“If the $50 late fee is paid in the account that remains in our office, we will not be able to accept any of the personal checks from you. Do you understand?”
So we also go over any clients with child care assistance. When we know that rate we put their rate there and we let them know that your child care rate which is greater than your child care assistance rate will equal up to your parent fee.
“This is your parent fee, which applies to all of the above standards. In the event that the student does not attend the full week you are responsible for paying for the full week. Any questions? Okay, initial right there.”
“Now that I’ve read the complete contract to you, I’m open to answering any questions you may have. If not, you can sign in there with your full name, your address, city, state, zip, your social number, your driver’s license, and then I’ll sign it.”
So that’s when you push the contract forward to the client, so you both parties can sign it. Once signed, hand over their own copy to them and say, “Well, we’d like to officially welcome you to our program.”
Let them know that you really appreciate their business, you will be here for them if they were to need you, and that you look forward to a continued relationship.
So I hope that this part brings you some clarity and understanding. Make sure that you initial so that you can have all of these parts signed by the parent to ensure that they read it and understand it.
I hope you understand now how you would discuss the flow of the contract with your client. What you need to highlight in a contract, what needs to be signed, and how to handle yourself during the contract signing process is no more feeling like “Oh we need you here!”
We need them to understand that if you’re going to be here this is how we expect business to be conducted.