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Daycare Center and Family Home Forum>Got A New Client, Wants A New Way To Pay, Need Help With Contract
daycare 09:58 AM 05-28-2011
So I landed a new kid who will take over one of my families while out on maternity leave. The child will be temp, so it all works out perfect.

So the dad's company will pay childcare pretax and the company will mail me the check direct. I will be paid every other week. So here is the thing. I have never delt with this before and I don't know how to apply all of my current policy late fees?

This is what DCM told me.
Need invoice 1 week before payment
payment takes 5 days to go out

I know that the dad cant controll when the check comes, once they leave the office, so how do I make sure that I still get paid on time?

I did tell the DCM that she and DCD would be the one responsible for all of the payments??Have any of you ever delt with this before? What would you write up? How would you handle this?
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MyAngels 10:17 AM 05-28-2011
The families in my daycare (most of them) use this program through their work, but they pay me, then get the reimbursement from the company. I simply sign a form (the invoice) telling them what my rate is and the dates it covers, they take care of getting themselves reimbursed.

If they insist on the company reimbursing you directly, I would invoice in advance at least a week, with payment due the following week. Late fees would still apply, which gives the parent the motivation to keep on top of their company payroll office.
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daycare 10:30 AM 05-28-2011
Originally Posted by MyAngels:
The families in my daycare (most of them) use this program through their work, but they pay me, then get the reimbursement from the company. I simply sign a form (the invoice) telling them what my rate is and the dates it covers, they take care of getting themselves reimbursed.

If they insist on the company reimbursing you directly, I would invoice in advance at least a week, with payment due the following week. Late fees would still apply, which gives the parent the motivation to keep on top of their company payroll office.
So so you think that I should change the contract to read that the payments will come from XYZ company, but that the parents will still be help responsible for all late fees?

My concern is that the company will say that I did not invoice them in time and blame me for not getting payment out ontime. I am invoicing the dad and the dad is turning it in to the company.
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morgan24 11:13 AM 05-28-2011
I have taken pretax money before and the parents pay me and the company reimburse them. I just give them a receipt for services and fill out a form for them every 3 months. I have never heard of having to invoice the company for payment.
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MyAngels 12:06 PM 05-28-2011
Originally Posted by daycare:
So so you think that I should change the contract to read that the payments will come from XYZ company, but that the parents will still be help responsible for all late fees?

My concern is that the company will say that I did not invoice them in time and blame me for not getting payment out ontime. I am invoicing the dad and the dad is turning it in to the company.
Yes, that is how I would do it. Your contract is with the parents, not the company. I doubt that the company would allow late charges to be taken out of the account anyway, so the parents will have incentive to stay on top of the payments to you, to avoid having to pay late fees out-of-pocket.
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daycare 12:07 PM 05-28-2011
Yes I find it strange and not sure how to Handel it. I am sure im over reacting and thinking negative about it, but I think it's because I've never had to deal with it before
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mac60 12:50 PM 05-28-2011
Originally Posted by morgan24:
I have taken pretax money before and the parents pay me and the company reimburse them. I just give them a receipt for services and fill out a form for them every 3 months. I have never heard of having to invoice the company for payment.
This is exactly how I have done it in the past. Nothing changes for the provider, still paid regularly, the parents are the ones that should be paying, never heard of this doing it they way they want.
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daycare 01:24 PM 05-28-2011
Originally Posted by mac60:
This is exactly how I have done it in the past. Nothing changes for the provider, still paid regularly, the parents are the ones that should be paying, never heard of this doing it they way they want.
me either again this is why I am asking here if anyone has ever done this before and if so how did they do it. I really don't have a good feeling about it...
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wdmmom 01:27 PM 05-28-2011
2 of my parents utilize this service through their employer but both families pay me and collect the reimbursement from work.

I would tell the family that you need to receive payment from them. That way there is no discrepancy and you are guaranteed to be paid on time.
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daycare 01:34 PM 05-28-2011
Originally Posted by wdmmom:
2 of my parents utilize this service through their employer but both families pay me and collect the reimbursement from work.

I would tell the family that you need to receive payment from them. That way there is no discrepancy and you are guaranteed to be paid on time.
I did ask if there was someway that they could do this and they said that their company will only do it this way to allow them to take advantage of the pretax.

ugh I don't know...
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momofboys 01:43 PM 05-28-2011
Originally Posted by daycare:
me either again this is why I am asking here if anyone has ever done this before and if so how did they do it. I really don't have a good feeling about it...

It's actually pretty common & the same thing as doing a flexible spending account for medical bills. I have never had a client pay that way but several years ago when I was working outside of the home we employed a PT caregiver & we did an FSA so we could get the tax benefit. Only we stil paid the provider & then the FSA reimbursed us what we paid. My guess is the payroll would be on top of it though. I would make the parent responsible if you are paid late though.
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daycare 01:49 PM 05-28-2011
Originally Posted by momofboys:
It's actually pretty common & the same thing as doing a flexible spending account for medical bills. I have never had a client pay that way but several years ago when I was working outside of the home we employed a PT caregiver & we did an FSA so we could get the tax benefit. Only we stil paid the provider & then the FSA reimbursed us what we paid. My guess is the payroll would be on top of it though. I would make the parent responsible if you are paid late though.
I started thinking that maybe I should bill them one month in advance this way I dont have to invoice every other week and i wont be so worried about being paid late. Do you think this would work?
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morgan24 02:24 PM 05-28-2011
Would dcd let you talk to his companies HR dept? I would want to be sure how it works before I started to make sure that payments were going to be made on time.
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SilverSabre25 02:24 PM 05-28-2011
I think I would call the company's HR and talk to them to make sure of how it works, from their perspective, first.
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sharlan 02:44 PM 05-28-2011
I've had two clients do this. Both paid me and were reimbursed by their employers when they turned in the paper work.

The only 3rd party payee that I accepted was the state. There, I turned in the paperwork after the client signed it.
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Abigail 02:52 PM 05-28-2011
How temporary is this? You should call and speak directly with his company because they have probably done this before with other providers. When you call and speak to them, you are also verifying it is a true place of employment as well.

I would have the parents pay a two-week deposit up front to be reimbursed at the end of the contract. I would require they pay you on time to avoid late fees (even if it's out of pocket) and then you can give them back anything they're over if it works out that way.
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Sunshine44 07:15 AM 05-29-2011
I say the parents pay you and if their work is willing to pay, then they take that to reimburse themselves...you shouldn't agree to anything with another party paying you like that.
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bgmeyers 08:08 AM 05-29-2011
I have a family that does this. I invoice the parents well in advance (like two weeks). Dad gives it to payroll and then I get a check in the mail. I get paid monthly. Been doing it for years. Works like a charm.
Contract states any late fees are paid by the parents in cash, but these parents have never been late for anything, so it's a non issue.
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Unregistered 09:24 AM 05-29-2011
I had this and it was a disaster. Mom claimed she had no control over it and couldn't even tell me when I was to get paid. I termed after a couple months of only pt care b/c it was such a headache.
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heyhun77 10:50 AM 05-29-2011
While it's possible that their company runs their FSA this way it's also possible that they are misunderstanding how it works. As others have advised I would contact their company to confirm that this is how they want to do it and then what their procedures are for payment.

As far as the contract the only thing I would do is to make an amendment in the payment section that you will submit the invoices to their company for payment but that if payment is not received by the due date that the parents must pay for it and when payment arrives it will be credited to future fees. If you make sure that the parents still know they are responsible for payment they will stay on top of it.
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nannyde 12:09 PM 05-29-2011
Originally Posted by Unregistered:
I had this and it was a disaster. Mom claimed she had no control over it and couldn't even tell me when I was to get paid. I termed after a couple months of only pt care b/c it was such a headache.
I have seen a few providers (including centers) who have done this and the company processing the payments started bouncing checks. It can add up REALLY quickly and the parents can be very upset when they realize they have to fight to get the money back.
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MN Day Mom 01:03 PM 05-29-2011
To possibly avoid disaster could you get the dcp to pay you and then when your check comes from their company you reimburse them... this way the risk is always on them and not on you??
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My Daycare 01:22 PM 05-29-2011
I have 3 parents that do this. My parents have to set it up so that the money is due about a week before it really is, or else the payment is late. Now that it is all straightened out I get my checks in the mail on Saturdays and payment is due the coming Monday.

The only time there is a problem is when they have to change something for a holiday (I don't charge holidays) then it takes some time for the company that pays to get on track again. When I don't get my checks by Monday's my parents write me a check, so I always get paid on time.

As long as they are willing to work with you, and not blame things on the check writing company than you should be OK. Just don't let them make it your problem.
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Meyou 06:22 AM 05-30-2011
Uuugh, this sounds messy. :S

Personally, I would talk to the company and whomever pays the bills DIRECTLY if they want you to be paid directly. Talk to the person who cuts the cheques and processes the invoices...not the boss...the person who places their hands on the paperwork and find out what the REAL terms of payment are. Some companies have an automatic 30 or 60 day hold on certain types of invoices. It's financially profitable for them to hold onto them for 2 months and pay a late fee while the money for the bill collects interest in the back. (I worked for a company like this)

Ask the bookkeeper everything you need to know:

Can the parents pay directly and be reembersed?
If so, what exactly do they need to do?
If not then....
How long from date of receipt of invoice to cheque in the mail?
How far in advance should you have the invoice in their hands to make sure you get payment BY your DUE DATE?
Would a lump sum invoice for the total amount be easier since it's temp care?

You should invoice for the first two months in advance due when the child starts regardless of what the payment terms are. Companies are used to quick turnover in invoices for startup costs and can push a cheque through for your intial fees so you don't have to wait for your money.

I would be very clear in my contract that PARENTS are responsible for late payment providing you submit invoices in a timely fashion according to the companies policy.

I would NEVER EVER EVER take a parents word about what a company is going to do regarding invoice payment. If the company is paying me I would have to talk to the company myself. It's my business and ultimately my responsibility that I dot my I's and cross my T's.
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daycare 09:21 AM 05-30-2011
Originally Posted by Meyou:
Uuugh, this sounds messy. :S

Personally, I would talk to the company and whomever pays the bills DIRECTLY if they want you to be paid directly. Talk to the person who cuts the cheques and processes the invoices...not the boss...the person who places their hands on the paperwork and find out what the REAL terms of payment are. Some companies have an automatic 30 or 60 day hold on certain types of invoices. It's financially profitable for them to hold onto them for 2 months and pay a late fee while the money for the bill collects interest in the back. (I worked for a company like this)

Ask the bookkeeper everything you need to know:

Can the parents pay directly and be reembersed?
If so, what exactly do they need to do?
If not then....
How long from date of receipt of invoice to cheque in the mail?
How far in advance should you have the invoice in their hands to make sure you get payment BY your DUE DATE?
Would a lump sum invoice for the total amount be easier since it's temp care?

You should invoice for the first two months in advance due when the child starts regardless of what the payment terms are. Companies are used to quick turnover in invoices for startup costs and can push a cheque through for your intial fees so you don't have to wait for your money.

I would be very clear in my contract that PARENTS are responsible for late payment providing you submit invoices in a timely fashion according to the companies policy.

I would NEVER EVER EVER take a parents word about what a company is going to do regarding invoice payment. If the company is paying me I would have to talk to the company myself. It's my business and ultimately my responsibility that I dot my I's and cross my T's.
So I talked to the mom today and told her that I have never taken 3rd party checks before and that I was not sure how to go about it. I decided that I will write a contract which states differently than the current ones. I also have to play a roll in making sure that I invoice on time and need to be fair. So if I don't invoice by a certain date, then it will be my fault that I dont get paid on time.. UGH just one more thing for me to have to do.
I asked if there was a way that they could pay me direct and the DCD said this is just the way the company does it. If they pay him they have to tax him. UGH so it looks like I will be having to figure this out. I think that if I do it for months in advance, I will be ok. Thanks for giving that advice, I know that when you are dealing with another party involving payemnts, things can get crazy.

Not looking forward to this, but I thought about it and it is some what similar of how state pay is done here, so I think I will survive...lol

Thanks for all of the advice..
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Lucy 07:20 PM 05-30-2011
Haven't read the other replies, so don't know if something like this has been mentioned.

I would have the parents give you a check for one month's care. Tell them you will HOLD the check. You can even tape it to the wall or something so they see you're holding it. If one month of care goes by and you haven't seen a check from the employer, you cash the parents' check.
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Tags:contract, payment options, rate change
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