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Reduce the Hassle in Billing, Payment and Late Payment Policies

In discussing with my clients their billing and payment strategies I have learned that it is critical to clearly outline in your policies when payment is due. You will receive payments primarily by cash and check and most of your clients will drop off their payments when they drop off their children. This process will work well for the bulk of your clients and you can decide how you wish to accept the payment and record the transaction.

You will have on occasion clients who forget to pay and it is important that you have policies and procedures laid out in advance and clearly outlined in your agreement form that each parent and guardian signs. You should expect to be paid on time. When you are not paid on time you should expect to receive penalty fees. I have found in discussing with my clients that when they are themselves in trouble financially it is due to not receiving payments from their own clients in a timely fashion.

You will have families in crisis and you will feel for them as you develop a bond with their children and with the parents. It is natural that you care for them and want to help. We will discuss creating ways to make payments on time more convenient in the next blog however it is important to remember that you are running a business. The income coming in is responsible for your livelihood and so you can make payroll and pay your own bills. Your electric company may sympathize with your own personal crisis but they still demand to be paid on time and you should too

When payment is late more than two business days you should begin charging a late fee. Most of my clients range from $10 per day to $25 per day. Send a notice home with the child in a sealed envelope that clearly lists the parents name and “confidential”. When payments are a week late it is time to make a phone call. I recommend that you speak to the parent on the phone as it is less embarrassing than confronting them in person in front of the child. If by this time that you still have not received payment, you must inform the parent or guardian that you can no longer provide service until you receive payment in full. In most cases this is enough to resolve the issue and you will get paid. In some cases a parent will move their child to another care facility and not pay their bill. Do not be afraid to take that parent and/or guardian to small claims court to receive a judgment in your favor and collect what is due.


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