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On paper, running a nursery might seem pretty straightforward from a financial standpoint.
Parents enrol their children at your setting, and pay you for the care you provide their children. Right?
Well, as we all know, there is a little more to handling your nursery finances than that, and it can be hard to fully focus on the children or keep up with their parents, when all the moving pieces aren't in exactly the right places. Especially now, managing your money can be a big source of stress for your early years setting. It's a big-picture problem to be fixed, and it won't happen overnight. But in the here and now, digital tools like early childhood platforms can provide some useful resources to relieve some of the pressure.
In this story, we'll look at three key ways that software can help you:
Let's look at how it all works.
Almost all the revenue you make at an early years setting comes from the children’s tuition and fee payments, so making sure your occupancy is as high as possible is critical.
As you well know, though, that's something that's much easier said than done.
You need to stay on top of attendance for each room every day, watch for children ageing out of the program or switching sessions, and make sure ratios are correct and correlate with changes in staff. It’s a lot to keep track of — but it’s a lot easier to reign it all in with an early years management software.
With a digital program (like Famly), you can have all the information necessary packaged into easy to read charts and graphs so you can:
And all this information collects over time so you can use historical data to plan for the future. Early years software lets you zoom out, see the big picture, and fill in the gaps — all within an app. If you can stay up to date on your enrolment, it will be that much easier to stay within your budget. If you'd like to read a bit more about why it's important to get strategic with your occupancy tracking, you should read this piece by ECE finance expert Louise Stoney.
Another important factor is knowing exactly how much revenue you need to budget your nursery. There are a lot of components that go into making a budget, such as:
A lot of time consuming paperwork and foresight goes into figuring it all out, but a comprehensive management software can help you answer all these questions.
The right software can create a target budget for you based on your nursery’s data, and can calculate a necessary cost per child for you. That way you know exactly where you need to be with your nursery finances at all times. You can also be notified when enrolment drops below your desired amount so you can act quickly to address it.
In order to continue providing the best care possible, you need a sustainable business model and an accurate, up-to-date budget is at the heart of that.
Supplementary funding can also be a saving grace for many early education settings when the budget is tight or when some unexpected costs arise — but finding that additional funding can be a job all on its own.
Some softwares can actually generate the documentation needed to reconcile further support from government and philanthropic sources on behalf of children eligible for financial assistance or funded hours. This can reinforce the budget with some extra wiggle room, alleviating a lot of potential stress through additional funding.
Budgeting and planning are great for nursery finances, but at the end of the day, the most important thing you can do for your Early Years setting is actually getting paid — regularly and on time.
Keeping track of every individual payment from each parent, matching invoices to all of them, and staying on top of past due tuition is tedious and time consuming. It’s a lot to handle and many managers and directors have to do it along with a laundry list of other daily tasks, but an Early Years software can take care of it all.
Once parents enrol their children, if you’re working with management software, they can input their bank information and sign up for automated payments. The parents receive regular automatic invoices so everyone is on the same page, without worry or forgotten chequebooks. And if a parent doesn’t want to sign up for automated payments and misses a deadline, an app can send a polite reminder without you having to touch a thing.
With reports, invoices, balances and payment handling all compiled in one location, there’s also no more need to manually upload stacks of forms and paperwork, saving time and cutting costs.
Nothing is worse than getting to the end of a quarter and realising you need to cut financial corners somewhere. And of course it’s hard to plan for surprise extra costs, but if you’re always getting paid on time, your planned budget will always be reliable.
When you have everything set up and automated, Early Years software also makes it easier for the parents to add on additional services like ad hoc sessions and meal plans, without emails or back and forth phone calls.
With so many factors at play, and so many different systems for keeping track of revenue and costs, it’s never been harder to stay on top of finances in early education.
But by monitoring enrolment, creating a budget for you and automating tuition payments, new software can make your life as an Early Years provider easier, and help guide your nursery into a prosperous future.
Please note: here at Famly we love sharing creative activities for you to try with the children at your setting, but you know them best. Take the time to consider adaptions you might need to make so these activities are accessible and developmentally appropriate for the children you work with. Just as you ordinarily would, conduct risk assessments for your children and your setting before undertaking new activities, and ensure you and your staff are following your own health and safety guidelines.