Default Style Register
Daycare.com Forum
Daycare Center and Family Home Forum>Charging By The Hour?
SilverSabre25 07:23 PM 03-01-2016
If you charge by the hour instead of some kind of set rate, how do you go about collecting payment? Especially from families that like to pay in cash
Reply
ChelseaB 07:45 PM 03-01-2016
Are you referencing for pre-pay or that there will be odd change?

I won't accept after the fact payments unless I have absolute faith in a family. I've been burned on that, but what I do for one family that I offer periodic credits to, I'll simply deduct the credit amount from their next payment. So if you're referencing that you want to do pre-pay, but it's an hourly rate, you could charge the expected average. Any overages or shortages could be used to adjust the next payment. It's not too difficult to do that way, although it seems like a pain to track

As for odd change issues, you could simply request check or money orders. You could also use an app that exchanges money from your client's acct to your acct, but there are fees associated with that.

Are these the concerns you were seeking solutions for? Hope it helps!
Reply
SilverSabre25 07:55 PM 03-01-2016
No, if I switch to charging by the hour it won't be pre-pay...which no one here wants to do anyway and requiring it has lost me more potential clients than is really worth it.

Mostly I'm wondering how other people do it. I know other providers charge by the hour and I'm just curious about the logistics. I don't necessarily want to have to keep change on hand, but some families don't want to pay via Paypal and/or Square (which are MY preferred methods of being paid) and I HATE checks. so I'm just trying to figure out how others do it
Reply
MunchkinWrangler 08:13 PM 03-01-2016
I always charge by a flat weekly rate, but have learned from this lovely forum that my time is valuable. So, I have started to implement charges based on hours per week and increase the rate if needed to new families. I want to move to contracted hours for any new families, I will still keep my open/close hours but I don't want to divulge because I feel anything over 8.5 hours a day needs an increase in pay. My hourly rate is $15/hour or $5 every 15 minutes. If any family needs 'extra time' they'll be charged accordingly but I need advance notice as I charge before care is given.
Reply
ChelseaB 08:27 PM 03-01-2016
Gotcha.

Okay, here's the thing -- I understand that it may be difficult to get families to sign on because they don't want to prepay. However, it is such common practice now. The majority of locations implement the "no pay, no stay" policy. I myself thought that my families wouldn't leave me high and dry, but they did. Yes, I was fortunate that the family paid their balance the Friday of what was to be their last day. However, 30 minutes prior to their scheduled arrival the next week, DCM calls and informs me that the children won't be coming anymore. I considered her more of a friend, and she left with no regard to my financial situation. Just hers. So the point is that I feel you need to look out for what's in YOUR best interest. Often, families don't want to prepay because they often realize that it automatically puts you in a position of power over them, so to speak. They realize they won't be making the calls, and that they'll be held accountable. Prepay (and 2-week notice requirement) helps weed out the daycare hoppers and flighty, unreliable parents. In our business, bad families are definitely NOT better than no families at all. They turn out to be the biggest headaches and cost more in the end. I'd much rather hold out for someone who is willing to be respectful of my business and program, KWIM?

I mean this all with the nicest of intentions, but this is YOUR business. Run it how YOU want. Who cares if your families don't want to pay using whatever system you want? They need to adhere to your payment options. They should be grateful you're doing hourly because I sure don't and never will. That was the biggest headache, and another way my business suffered TERRIBLY. Kids staying home or with relatives to save mom and dad money. Yet, here you are, relying on them to come and that income...but it's now gone.

But if I can't convince you to hold out for those who would work with you, then the only other option id be willing to even offer is the rounding system. If their bill due is $157.66, I'd be rounding to $158. If it's under the .50 cent mark, round down. Id say it would balance out in the end and at least eliminate the odd change. I can't foresee too many complaints about that, I'd think the families would hate the odd change as much as you! Lol good luck, I'm sorry I can't be of more help!
Reply
jenboo 01:19 AM 03-02-2016
If they don't prepay, I would recommend having them pay daily. That way if someone trys to skip out on paying, it's only one day instead of a whole week.
Maybe you could give prepay clients a discount (your current rate) and daily after care payers an increased amount. I bet people would take you up on prepaying.
Reply
mamamanda 03:21 AM 03-02-2016
I used to charge an hourly rate and just switched to daily rates last August. I did not keep any change on hand. Parents knew that all money was due on Friday and they were responsible for bringing the correct amount. If they owed $75 and they brought $80 b/c that's all the bank machine would give them, well that's their issue. I was willing to keep the $5 as a credit for the next week, but I was not willing to find change for them.

I also didn't track exact minutes. If they want to bring the kid from 9-1 and they show up for pick up at 1:20, then they paid for 4.5 hours. I typically rounded to the nearest half hour. I will say it was a pain in the butt to keep track of. Switching to a flat daily rate has saved me so much stress. And I know how to budget for my own bills as well b/c I know I'm going to make such and such amount each week.
I also found it was more work worrying about ratios when I allowed the hourly thing b/c I might have one family that says they will come 9-12 and another from 1-5. Then first family thinks b/c they are hourly they can change as needed & just pay for an extra hour or two and are late showing up which leaves me with an extra kid I wasn't expecting in the afternoon.
I would say if you're seriously considering this then you need to make sure your contract outlines the details very clearly and stick to it.
Also, I know most providers have parents pre-pay and I honestly think that is best. However, in my own daycare I have mostly had people I know or friend of a friend kind of a thing and so I allow them to pay at the end of the week. I still charge by the day, but all money is due on Friday at the end of the week. I personally haven't had anyone try to get out of paying, but like I said most I have worked with are friends so I feel like I can trust them more than most. It would only take one time of not paying for me to terminate care though unless there were extenuating circumstances I had already discussed previously with the family in detail. I did have a family who was excellent about paying who got in a bind one time. They asked for 2 weeks to catch things up and I allowed it. I realized I was taking a chance, but they'd been great up until this point. They paid in full at the end of the 2 weeks and never had that issue again.
Reply
e.j. 12:07 PM 03-02-2016
I base a family's weekly tuition rate upon the number of hours they told me they would need each week. For example, I have several families who need a full 40 hours per week. They pay my hourly rate x 40. Another family needs 32 hours per week so they pay my hourly rate x 32 and so on. Since we have a contract based on agreed upon hours, they all know what they owe for tuition each week because that doesn't generally change. If their child is absent for any reason, they still pay their agreed upon rate. If for some reason, they need additional hours and I have the space, they just give me a check or cash for the additional dollar amount owed.

I have had some families who prefer to pay cash. Like every other family, they know what they owe ahead of time so there really isn't any reason they can't give me the exact dollar amount owed. One family prefers to round up what they owe me and they don't expect change. (Works for me!) If they did want change, I'd insist they give me the correct amount because I don't want to have to worry about having extra cash lying around the house in order to make change for them. I'm not a bank. My families pay at the beginning of the week but it would work the same if they were paying me at the end of it.
Reply
Tags:charging hourly, contracted hours, hourly - contract, hourly rate
Reply Up