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  #1  
Old 11-02-2012, 12:52 PM
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Default Charging Hourly vs. Flat Rate?

I am deeply considering charging hourly, billed on Friday at pick-up, and to be paid Monday before drop-off. I have done flat-rate before, and haven't had problems with it, but I was only watching 1-2 children max, and the parents never abused the times.

After working full time, and sending my own children to daycare, I saw how many parents abused it. If I'm going to bill for 'over hours' and 'too early hours', I might as well just bill hourly. I can do an hourly rate, and bill based on the sign-in and sign-out hours. I can hand them a tuition bill Friday at pick-up, and they can bring me cash or check Monday morning during drop-off, or pay online over the weekend.

I like that flat-rates are easy, though. However, if I'm supposed to do 9am to 5pm, I don't want to have to mess with 'billing' for 8:25 to 5:45. I feel like if I do hourly, parents will be encouraged and motivated to get here on time, and not drop them off too early. Plus, if they pick them up early one day, I can give them a discount.


Anyone else bill hourly? Or does everyone just do the flat-rate with contracted hours, and bill extra for overages?
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  #2  
Old 11-02-2012, 01:08 PM
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I bill flat rate with contracted hours.

My concern with hourly is, would you have a minimum, then each additional hour? It would make me nervous that when dcp of 2 kids in my care gets broke (gets paid monthly) I would be broke too.
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  #3  
Old 11-02-2012, 01:14 PM
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Originally Posted by daycarediva View Post
It would make me nervous that when dcp of 2 kids in my care gets broke (gets paid monthly) I would be broke too.
Sorry, I'm tired, but I don't know what you mean by that. Do you mean.. That you think a parent could go from 40 hours to 4 if they were between jobs or couldn't afford it or something?

I would require full time or part time minimum hours (15+ and 30+) per week. And if they fell below those hours, they would have to request new admission based on those hours. I may not accept a full timer that wants to go part time, if I have another child that wants in on a full time spot.

I'm more flexible with hours and payment than most (as I give parents allowable sick days and vacation days unpaid, but there is a cap).

I suppose weekly would be much easier.. I just thought hourly would give me an easier way to bill for hours if they went over, and it would 'remind' them payment is due, since most parents forget when you don't hand them something reminding them!
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Old 11-02-2012, 01:21 PM
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I just switched from hourly to flat rate this year. I love it and making money!!!!

I don't care if you pick up early your still paying flat rate, I don't care if you won't be here till later your still paying flate rate.

I don't care if your child is here open to close -still flat rate.

Wished I had done this 20 years ago-
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Old 11-02-2012, 01:24 PM
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Ahhh ok, I see.

Yes that's what I meant. I have a dcp that gets paid monthly through her employer. She gets paid on the 15th of one month and come the first week of the next month she is whining about paying me. She still does, and ALWAYS on time, but the 'broke' comments KILL me. I KNOW she would take them out as much as possible the week before she gets paid(but normally leaves them here open to close despite the additional fees for the first two weeks) Everytime she says she is broke I 'suggest' she pay monthly next time, she agrees and never does. Rinse and repeat.

I think for me I am too lazy to be adding hours every day for all 8 kids. I have a flat rate and then only have to add fees when there is an issue.
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  #6  
Old 11-02-2012, 01:26 PM
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Originally Posted by Country Kids View Post
I just switched from hourly to flat rate this year. I love it and making money!!!!

I don't care if you pick up early your still paying flat rate, I don't care if you won't be here till later your still paying flate rate.

I don't care if your child is here open to close -still flat rate.

Wished I had done this 20 years ago-
Is the flat rate the same for everyone? Or do you base it off of their hours of when they think they will need you? The going rate is $100/week for child care, but I'd like to get $125-$135 full time (up to 45 hours), and $70 part time (under 28).
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  #7  
Old 11-02-2012, 01:28 PM
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Ahhh ok, I see.

Yes that's what I meant. I have a dcp that gets paid monthly through her employer. She gets paid on the 15th of one month and come the first week of the next month she is whining about paying me. She still does, and ALWAYS on time, but the 'broke' comments KILL me. I KNOW she would take them out as much as possible the week before she gets paid(but normally leaves them here open to close despite the additional fees for the first two weeks) Everytime she says she is broke I 'suggest' she pay monthly next time, she agrees and never does. Rinse and repeat.

I think for me I am too lazy to be adding hours every day for all 8 kids. I have a flat rate and then only have to add fees when there is an issue.
Yeah, maybe that would be best. I may end up spending too much time logging hours and figuring out how much it is, and there may be conflicts on the hours. So maybe I'll just do flat-rate, and figure out what I should charge...
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  #8  
Old 11-02-2012, 01:34 PM
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I charge a set amount, (all pay ft rates, regardless of attendance and am fortunate to be able to do so now).

Prior to this I came up with an hourly pay scale, say 5-20 was X amount and could only be used in a two day time period. 20-30 was x amount and had to be used in a three day time period and 30-50 was x amount and could be used in a 3-5 day time period.

Like I said, Im lazy and didn't want to argue with parents.
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  #9  
Old 11-02-2012, 01:36 PM
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Originally Posted by Country Kids View Post
I just switched from hourly to flat rate this year. I love it and making money!!!!

I don't care if you pick up early your still paying flat rate, I don't care if you won't be here till later your still paying flate rate.

I don't care if your child is here open to close -still flat rate.

Wished I had done this 20 years ago-
This is how I've done it for 20 years! I love it. I never even remind my parents to pay. Every Friday, they all come in with cash automatically. Nice!
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  #10  
Old 11-02-2012, 01:40 PM
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I offer contracted hours between set times (7:15a-5:15p). I absolutely do not do early drop offs or late pick ups beyond those set hours but don't mind being flexible within them on rare occasions.

I do not charge for flexibility within those set hours.

I charge down to the quarter hour. So if someone drops off at 8:04am and picks up at 4:11pm I'd bill that as 8:00-4:15 (8.25 hours). If you don't want to mess with that level of break down you can bill to the half hour (8:00am-4:30pm) or even whole (8:00am-5:00pm) and if parents drop off a bit later or earlier than that give them a pat on the back and praise them for wanting to spend time with their kid. Maybe shoot them a break every once in awhile in appreciation if they make it a habit. I like to do that on the holidays, my parents have been so appreciative when I have done that in the past.

I send out invoices via email by Saturday at 7pm and payment is due the morning the kiddo is dropped off the following week. I'm sorry but I have zero interest trying to do math on a Friday afternoon when my brain is fried lol

I have no one who stays open to close, which I believe is best when kids are this young. That said, I only take full time hard working families who need me a minimum of 32+ hours/week so those weeks where I only make the minimum 20 are very very rare. The structure those hours afford the kids make them infinitely easier to handle and in general they seem happier.

I do charge a weekly minimum or 20 hours so if anyone happens to go on vacation I'm still able to maintain a decent income.



For me it's a bit of a pain to crunch the numbers sometimes, but I've found the system to be the best fit for me and my parents really appreciate it over doing a flat rate. I think in the end the kids get the most out of it as parents are pretty "inspired" to get over here fast to pick them up and stop the clock from running lol.

It's been well worth the minor Saturday afternoon headache it causes for them to reap that benefit
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  #11  
Old 11-02-2012, 01:57 PM
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I charge a weekly flat rate but there are conditions. One week costs $160 per week and is for 10 hours maximum a day (50 hours a week) on a contracted schedule. Meaning they need to tell me and decide on which 10 hours a day they are going to use.

Late arrivals don't allow for late pick-ups so if they are late in dropping off in the morning then they still have to pick up at their normal pick-up time. If they are absent for whatever reason then they lose that day and there are no deductions or discounts and there are no make up days (for part-timers).

If they need to drop off off earlier or pick up later than their contracted schedule and they arrange it with me in advance then they pay extra (whatever their hourly rate breaks down to). If they drop off early or pick up late without telling me then they pay $5 fo revery 15 minutes (or portion) that thet are late. I don't give grace periods.

The reason that I don't do hourly rates for all clients (but I do accept drop-ins) is because then they only want to pay for the times that they do use and sometimes they start changes their times all crazy. Before you know it your full time client takes 2 days off from work and then only pays you for 3 days instead of the 4. Then they start not wanting to pay for holidays etc. Sorry, but that doesn't work for me. Give me your schedule and we will figure out a contracted time and that's the fee even if you choose not use all of that time. Clients are paying me for a guaranteed spot for their child, if they decide to come in 2 hours late thats ok ... I was already paid for those 2 hours.
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  #12  
Old 11-02-2012, 03:36 PM
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Originally Posted by MarinaVanessa View Post

The reason that I don't do hourly rates for all clients (but I do accept drop-ins) is because then they only want to pay for the times that they do use and sometimes they start changes their times all crazy. Before you know it your full time client takes 2 days off from work and then only pays you for 3 days instead of the 4. Then they start not wanting to pay for holidays etc.
Wow!

I'm not sure what kind of families you've had to deal with in the past but I can about imagine if that's been your experience!!! How incredibly disrespectful!!!


My families would never tell me they were switching times or days. Or tell me they were only going to pay me for certain days or for "x" amount. They may *ask* me anything they wish, but they know I have final say and if they don't like it they are more than free to seek care elsewhere.

I've moved, and I've had to terminate a family only once....that's been my only voluntary turnover beyond aging out.....never had a family leave or even attempt to alter the terms of our arrangements. After reading your above I feel very blessed in that regard!



And actually, on the flip side, many of my families who have come from other daycares moved primarily because they couldn't stand flat rates. Many on my waiting list are hoping I'll terminate current families so they can get in on hourly. Once they're in, they'll avoid doing anything that might jeopardize them losing their spots lol
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  #13  
Old 11-02-2012, 04:21 PM
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I havn't had bad experiences in this regard because I have always charged flat weekly fees for my FT and PT families. The only clients I charge an hourly rate to are my drop-in clients that I fill my gaps in with and even they start as drop-in clients until I do get an opening for FT or PT.

I am however on our childcare association board and one of the things we do is offer support to other family childcare provider with issues. This issue comes up alot. In many cases a child care provider will start by charging hourly and will keep a log of the hours that the child was in daycare and then at the end of the week they would invoice the families. So one week the child would be in care 4 days and 40 hours then one week the child would be in care for 2 days and 8 hours etc. It was all over the place.

Or maybe I'm misunderstanding ... I charge a flat weekly rate based on the maximum hours that the families need. Many of my families are charged a different rate because they have different scheduled hours but their weekly rate is always the same. Is that what you mean by hourly? Because to me that's still considered a flat weekly rate. I guess to me it just doesn't make sense to charge based only on the hours that the family needs and not set it in stone. It leaves a lot of room to have the family take a day of or two and not have to pay for those days.
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Old 11-02-2012, 04:32 PM
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Originally Posted by MarinaVanessa View Post
I havn't had bad experiences in this regard because I have always charged flat weekly fees for my FT and PT families. The only clients I charge an hourly rate to are my drop-in clients that I fill my gaps in with and even they start as drop-in clients until I do get an opening for FT or PT.

I am however on our childcare association board and one of the things we do is offer support to other family childcare provider with issues. This issue comes up alot. In many cases a child care provider will start by charging hourly and will keep a log of the hours that the child was in daycare and then at the end of the week they would invoice the families. So one week the child would be in care 4 days and 40 hours then one week the child would be in care for 2 days and 8 hours etc. It was all over the place.

Or maybe I'm misunderstanding ... I charge a flat weekly rate based on the maximum hours that the families need. Many of my families are charged a different rate because they have different scheduled hours but their weekly rate is always the same. Is that what you mean by hourly? Because to me that's still considered a flat weekly rate. I guess to me it just doesn't make sense to charge based only on the hours that the family needs and not set it in stone. It leaves a lot of room to have the family take a day of or two and not have to pay for those days.
I also charge just like MV... I charge a daily rate that is multiplied by the number of days that you attend care. This then becomes your weekly rate. You are allotted 9.5 hours of care each day. Anything over 9.5 hours of care is charged at the rate of $6.00 per hour or fraction thereof.

If you only charge when they are there, you can never forecast the amount of money to budget for. Kind of funny how when given hourly option, all of a sudden grandma can watch them or someone else....
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Old 11-02-2012, 05:08 PM
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Whatever you do, the best thing I have learned from this board is to get paid in advance.

Our families pay on Fri. for next week.

If you need to overcharge them and then give them a credit for unused hours, do that.

Personally I would not want to deal with calculating hours or not having a steady income, but I can see how it is fair and parents would like it. It just sounds like a big hassle to me. I prefer a flat rate
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Old 11-02-2012, 07:36 PM
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Originally Posted by MarinaVanessa View Post

Or maybe I'm misunderstanding ... I charge a flat weekly rate based on the maximum hours that the families need. Many of my families are charged a different rate because they have different scheduled hours but their weekly rate is always the same. Is that what you mean by hourly?

Not quite, but almost

All of my families work or go to school full time. They NEED care Monday through Friday x-am through x-pm so it's never been an issue for me to have a child come 40 hours one week and only 8 the next. If they pulled that they'd lose their jobs or fail out of school. These are two parent working families who need the income. I screen carefully for this at interview time. They must value stability, and understand full well that kids keeping the same schedule day to day is incredibly important. It's not difficult to pick parents like that out, they're pretty obvious lol

In the very unforeseen and rare circumstance that say, there is a death in the family and they need to attend a funeral out of state, have a grandparent want to kidnap them for the week or they happen to take a vacation, that's where my 20 hour minimum would come into play. But if they happen to just get off work early by a half hour or school is out a day or two here and there that's where hourly pays off for them.

I keep track of in an out times, add them all up, multiply by my hourly rate and send my invoices off every two weeks - after services rendered. Totals rarely vary more than $20 from invoice to invoice and I'm completely fine with that.

Those little bits don't impact my bottom line much at all and I like that parents promptly shoot over here if they have the chance to come early. Kids are happy, parents love it, and I make money and retain great clients who jump at the chance to spread the word about me as a great and fair provider. Win, win, win...win, win lol

Even as a single mother of two I made plenty enough to pay my bills, take care of necessary daycare expenses and have wiggle room to spoil myself and my kids. I'm not going to lie, the invoicing can really be a pain, especially with families who have two kiddos and one is gone at pre-k for a portion of the day. But I see that as the only downfall and the payoff makes it well worth the extra hassle.



All that said, I will say I understand full well why it wouldn't be for everyone. I keep a small group, and for large groups it would be pretty tough to manage. If you've been burned enough times I can see why you'd do things differently as well.
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Old 11-03-2012, 04:44 PM
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Originally Posted by daycarediva View Post
I bill flat rate with contracted hours.
that and if they go over contract hours charge an over time fee such as $1/minute early drop off or late pick up; or $5 for every 15 minute incriment early drop off/late pick up both starting with in 5 minutes of being early or late. Because that can mess with your numbers if you have part timers coming in and out at different times of the day, which can get you introuble with licensing if they come to do an inspection that one time 1 have 1 more kid- it happened once to a lady I used to work for one of her assistance when to get some kindergartners and she was one kid over when the inspector came and she got had to pay a penalty/fee and all the parents in her program as well as the ones who sign up for the next year had to sign a paper that said they understood that she was alone with one extra child than she was allowed to have for 15 minutes- luckly she's been in business for over 30 years and she was well respected in her community (she was one of the most indemand providers in her area) and her parents thought it was stupid that the inspector wrote her up for that.
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Old 04-10-2013, 08:48 PM
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I'm considering changing my fee structure to include a higher fee for 50+ hours of care or 10+ hours a day, I am not sure which is the better way to go. My hope is the 50 hours plus would discourage long days.

5-20 hours (used in a 2 day time period) xxx/week
21-30 hours (used in a 3 day time period) xxx/week
31-50 hours (used in a 5 day time period) xxx/week

choices:

Anything over 10 hours/day $5/hour (charged for any portion of the hour used)

or

50+ hours is xxx/week

Which makes more sense?

ETA: just saw how old this post was ! haha - I searched the topic hoping for a recent thread...oops!
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Old 04-11-2013, 05:30 AM
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I USED to do hourly when I started daycare the first time around many years ago and would NEVER go back to it.

I found parents would find reasons and free sitters to keep their kids all the time. I never knew what my income would be. And trying to keep track of everyone's hours!!!! Then there's always parents who want to 'argue' about how many hours you're charging for...they have 'different' hours figured out. Nope, not worth it to me.
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Old 04-11-2013, 05:39 AM
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My parents are contracted to their hours so they would always fall in a certain range I can predict - if they wanted to change from 5 day to 2 day that would require an actual contract change that I would need to approve.
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Old 04-11-2013, 07:42 AM
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Originally Posted by EAP View Post
I'm considering changing my fee structure to include a higher fee for 50+ hours of care or 10+ hours a day, I am not sure which is the better way to go. My hope is the 50 hours plus would discourage long days.

5-20 hours (used in a 2 day time period) xxx/week
21-30 hours (used in a 3 day time period) xxx/week
31-50 hours (used in a 5 day time period) xxx/week

choices:

Anything over 10 hours/day $5/hour (charged for any portion of the hour used)

or

50+ hours is xxx/week

Which makes more sense?

ETA: just saw how old this post was ! haha - I searched the topic hoping for a recent thread...oops!
I charge for anything over 10 hours per day because I felt if I used 50 hours per week that parents might think it's ok to pick up at the 11th hour and make up for it later in the week. I don't want to have plans, thinking all my dck's are leaving by 5 pm and have that one who thinks they can use an extra hour to arrive at 6 pm for pickup. I want to know all my kids will be gone after 10 hours every day.
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Old 04-11-2013, 08:08 AM
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Originally Posted by EAP View Post
I'm considering changing my fee structure to include a higher fee for 50+ hours of care or 10+ hours a day, I am not sure which is the better way to go. My hope is the 50 hours plus would discourage long days.

5-20 hours (used in a 2 day time period) xxx/week
21-30 hours (used in a 3 day time period) xxx/week
31-50 hours (used in a 5 day time period) xxx/week

choices:

Anything over 10 hours/day $5/hour (charged for any portion of the hour used)

or

50+ hours is xxx/week

Which makes more sense?

ETA: just saw how old this post was ! haha - I searched the topic hoping for a recent thread...oops!
This is what works well for me. When this thread was written, I had all FT kids or they paid for a FT spot. Since then, I had a bit of turnover (family moved, dcm lost her job and I termed) and filled a couple of those spots in with PT'ers and my rate schedule for this is below.

I ONLY ALLOW 10 hour days, contracted hours with agreed upon drop off and pick up times. If they want more than that, it is $5/hour or partial hour and I have to approve the schedule change in advance. There are forms by my front entrance that they can grab and submit to me with date and time. I let them know if they are approved, and they have to pay the morning of/prior to the extended care time.

50 hours/or 5-10 hour days-175/week
40 hours/or 4-10 hour days-160/week
30 hours/or 3-10 hour days-135/week
20 hours/or 2-10 hour days-100/week *I only do 2 days if they can work around another PT schedule*
10 hours-$50 or $5/hour with a minimum of 4 hours/$20

This works out great for me, it's a little less money, but also less work. I do have one family that uses me for T-W-TH and another that uses me for M-F, so for one space, I am making $235 instead of $175 regular FT rate.
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Old 04-11-2013, 08:36 AM
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Quote:
Originally Posted by EAP View Post
I'm considering changing my fee structure to include a higher fee for 50+ hours of care or 10+ hours a day, I am not sure which is the better way to go. My hope is the 50 hours plus would discourage long days.

5-20 hours (used in a 2 day time period) xxx/week
21-30 hours (used in a 3 day time period) xxx/week
31-50 hours (used in a 5 day time period) xxx/week

choices:

Anything over 10 hours/day $5/hour (charged for any portion of the hour used)

or

50+ hours is xxx/week

Which makes more sense?

ETA: just saw how old this post was ! haha - I searched the topic hoping for a recent thread...oops!
I do a flat rate based on 45 hours and after that it's $5 an hour.
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Old 04-11-2013, 09:29 AM
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I do both.

For example ...

Full-time is 4-5 days per week and charged at a flat weekly rate of $$$ per week, paid on the child's last day of attendance for that week which covers the following week in advance. This flat fee covers up to 50 hours per week and up to 10 hours per day. Anything over 10 hours per day or over 50 hours per week is charged an extra fee at the rate of my drop-in. Their spot is guaranteed.

Part-time is charged on a flat weekly rate also (is charged more hourly than full-time) which depends on the child's pick-up time (Nan's fee schedule). Part-time is considered 2-3 days per week up to 30 hours per week and no more than 10 hours per day. Anything over 10 hours per day or over 30 hours per week is charged an extra fee at the rate of my drop-in. Their spot is guaranteed.

Drop-in clients are charged a daily or hourly rate (daily is more expensive than a full part-time day but less expensive hourly than drop-in hourly). Their spot is not guaranteed and based on availability. Flexibility costs extra.


In all honesty I think that the reason why OP doesn't have issues with people misusing their times is because you charge weekly... otherwise I think that your clients may all of a sudden find friends/family to help care for their child on some days in order to save money but leave them in DC longer on some days since they are now saving money.
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Old 04-11-2013, 12:10 PM
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I do both.

For example ...

Full-time is 4-5 days per week and charged at a flat weekly rate of $$$ per week, paid on the child's last day of attendance for that week which covers the following week in advance. This flat fee covers up to 50 hours per week and up to 10 hours per day. Anything over 10 hours per day or over 50 hours per week is charged an extra fee at the rate of my drop-in. Their spot is guaranteed.

Part-time is charged on a flat weekly rate also (is charged more hourly than full-time) which depends on the child's pick-up time (Nan's fee schedule). Part-time is considered 2-3 days per week up to 30 hours per week and no more than 10 hours per day. Anything over 10 hours per day or over 30 hours per week is charged an extra fee at the rate of my drop-in. Their spot is guaranteed.

Drop-in clients are charged a daily or hourly rate (daily is more expensive than a full part-time day but less expensive hourly than drop-in hourly). Their spot is not guaranteed and based on availability. Flexibility costs extra.


In all honesty I think that the reason why OP doesn't have issues with people misusing their times is because you charge weekly... otherwise I think that your clients may all of a sudden find friends/family to help care for their child on some days in order to save money but leave them in DC longer on some days since they are now saving money.
Where is her fee schedule??
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  #26  
Old 04-11-2013, 12:40 PM
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This is how I've done it for 20 years! I love it. I never even remind my parents to pay. Every Friday, they all come in with cash automatically. Nice!
Same here!
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Old 04-11-2013, 03:15 PM
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Originally Posted by LaLa1923 View Post
Where is her fee schedule??
I will PM you a link to an example.
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Old 10-09-2014, 11:37 AM
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Default DHS Payments

With your family's that get help thru DHS, how does that work if your daycare has a flate rate? New to daycare and have a few families the only way they can get daycare paid for is thru DHS payments. Paperworks states the DHS will pay 95% and client to pay 5%. If I have a flate rate will DHS pay my flate rate? Just having questions regarding after school care. Kids are only there 2 hours daily and 10 hours weekly. Full-time babies are there more and I will have no trouble with their hours.

Thanks!
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Old 10-09-2014, 11:48 AM
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With your family's that get help thru DHS, how does that work if your daycare has a flate rate? New to daycare and have a few families the only way they can get daycare paid for is thru DHS payments. Paperworks states the DHS will pay 95% and client to pay 5%. If I have a flate rate will DHS pay my flate rate? Just having questions regarding after school care. Kids are only there 2 hours daily and 10 hours weekly. Full-time babies are there more and I will have no trouble with their hours.

Thanks!
What state are you in?

Some states do not allow providers to charge families on assistance anything more than the state pays out.

I am in MN and I charge about $3 more per day than the state assistance program pays out so my daycare parents pay that $3 per day PLUS whatever co-pays they have.
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Old 10-09-2014, 12:53 PM
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When I first opened ( 11+ years ago) I did hourly and it was a nightmare . Even with a contract that clearly spelled out rates and what would be owed there was always one dcp who would not want to pay what they owd because they were 1 minute early so they did not feel they needed to pay for the hour , or the dcm who would count up the minutes for the whole week and try to pay me by the minute so she would pay less .

Not worth it .
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Old 10-09-2014, 01:29 PM
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Originally Posted by MyKzooFamily View Post
Anyone else bill hourly? Or does everyone just do the flat-rate with contracted hours, and bill extra for overages?
I bill hourly. I am not going to lie, it is not the easiest way to go about things, but it is what I do. I also take a LOT of part time/drop in kiddos. It takes some work to balance time vs money, and part time vs full time.
It can and is being done, but the concerns the others have are valid. You must decide if you are willing to put forth the effort.
If your issue is parents not following the rules, hourly is not going to fix that for you.
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