Financial Management for Daycare Software

Revenue Management - Perhaps the single most important area for automation with your daycare software is the managing of fees and center revenues. Although most off-the-shelf accounting systems provide Accounts Receivable, they are usually very poorly suited to the unique requirements of centers. Daycare centers have many specific needs associated with their daycare software such as providing parents with a year-end record of payments, managing parental and subsidizer fees, and automatic posting of recurring charges. Virtually any daycare software designed for centers will handle these needs; however they will vary widely in their ability to accommodate various rate structures and the ease with which they allow you to work with ledgers and perform postings. Good daycare software will provide adequate checks and audit trails to ensure that postings are made correctly.

Electronic Fee Collection - One major innovation in center fee collection is the ability to allow parent fees to be collected automatically by EFT (electronic funds transfer) or automatic credit card billing. This technology in daycare software offers the potential of more reliable cash flow, less administrative time and cost, enhanced convenience for parents, better security and control of funds, and allowing directors to minimize the need to act as a collection agent. This technology is widely used by health clubs, faith-based schools, and utilities, and is now available to daycare centers as a product called EZ-EFT. See Tip of the Month (PDF)

Expense/Financial Management - Managing the daycare center's checkbook and producing financial statements are handled by the Accounts Payable and General Ledger component of daycare software. These functions allow the center to save time in paying bills, and analyzing the center's financial results. Although almost anyone can typically use an Accounts Payable system, it is usually best to have a trained bookkeeper or accountant responsible for the General Ledger. If you are unfamiliar with a G/L chart of accounts and the difference between a debit and a credit, you may wish to leave this responsibility to your accounting firm instead of using the daycare software.

Payroll - Calculating wages, taxes, deductions, etc. is a time consuming process for any business. Many organizations use outside payroll services , but payroll software can make this process relatively quick and easy. Centers that use a computerized time-clock should be able to transfer staff hours into this component, eliminating almost all data entry in the daycare software.