5 min read
How late payers are costing you money – and how to fix it
In our article about ‘The secret of successful childcare businesses’ we revealed how the most successful childcare centres across Australia are using software integration to decrease the amount of time their staff spend on repetitive administration tasks and time-intensive compliance work. By using software to lighten their manual workload, these top performing childcare centres are decreasing their staffing costs and increasing their profit margins – despite operating within a highly regulated industry that has an increasing amount of red tape to contend with. With the right software, you can do this in your childcare centre too.Nevertheless, the majority of business owners are already aware that reducing operating costs is a reliable starting point in the mission to increase profits – it’s not exactly a new concept in business. But, what many business owners don’t realise is that the way cash flows into your business is just as critical to increasing your ability to compete and boosting your bottom line. And, if you can get both sides of the cash flow equation right, you’ll be packing a one-two punch against your competitors. In this article, our experts reveal how.
Late payers are more than just an inconvenience
We’ve been helping childcare centre owners to manage their incoming parent payments for many years – so we know what your challenges are. We know that you’re probably manually combing through payments each week; you’re manually tracking who’s paid and who is yet to pay; you’re cross-checking data in multiple systems and you’re spending hours on the phone chasing your late paying parents. You already know that late payers are massively inconvenient, but the fact is they’re also having a massive impact on your childcare centre’s profits.
Late payers are eating away at your profits
Late payers are eating away at your childcare centres profits from several angles, including:
- you’re paying more in labour costs as your staff sit on the phone chasing late paying parents for hours (which also has a negative impact on your staff ratios)
- you’re exposing your business to an increased risk of needing to rely on credit to pay your operating costs while you wait to get paid (therefore costing you interest), plus
- you’re paying the longer-term costs of not having spare cash on hand to take advantage of business growth opportunities as they arise – such as investing in marketing campaigns, new facilities or business expansion opportunities.
Consider how your profit margins would improve – both in the short-term and the longer-term – if you could eliminate these burdens that late payers place on your childcare business.
How to get paid on time and remove the burden of late payersIt’s true that sometimes even the best of intentions can go wrong – and even the most reliable payers in your parent community might honestly forget to pay you every once in a while. That’s why the only sure strategy to making sure you get paid on time is to shift your parent community onto automated direct debit payments. The right automated payments software will make sure you receive each parents’ payment on the day that it’s due, significantly reduce your time spent chasing late payments and remove the burden of late payers from your cash flow equation.
The most successful childcare centres are already using automated payments software – and to compete on their level you need to do it too.