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For many, talking about money can be a sensitive topic. When running a childcare business, this is especially the case when it comes to asking for payment on unpaid invoices. Sending a payment reminder to your families can be uncomfortable, but it’s a necessary part of owning a business. With a clear payment policy in place and an organized billing system, you can stay on top of late payments and ensure your childcare business gets paid on time.
In this article, we'll provide the best strategies on how to ask for late payments and a sample payment reminder template.
How to ask for payment
As a childcare business owner or administrator, protecting the financial health of your program is a top priority. To pay your own bills on time, you need to receive prompt and complete payments each month from your families. Creating an organized billing system to send invoices, track payments, and follow clear procedures for unpaid invoices is essential.
Establish a clear payment policy
Your first line of defense for ensuring on-time payments is a clear payment policy that is communicated to all families.
- What to include: Your payment policy should specify deadlines for invoice payments (e.g., the 1st of the month) and the consequences of late payments (e.g., a $25 late fee on the 6th day of the month).
- Where to share it: Include your payment policy in your family handbook along with your other policies.
- Get it in writing: Have families sign off on the policy to confirm they have read and understood your terms. This will also help protect you in case of any payment disputes.
Family Handbook Templates for Childcare Centers and Preschools
Use these templates to create a comprehensive and well-organized handbook for the families you serve.
Offer multiple payment options
Make it convenient for families to pay you by offering multiple payment options. These can include:
- Cash or check
- Credit card
- Bank transfers (ACH)
Accepting various payment methods can help reduce barriers to paying on time, as families can choose their preferred way to pay.
With brightwheel billing's new feature, you can skip the trips to the bank and deposit checks directly in the brightwheel app. Seamlessly track all payment types in one place and get faster access to your funds.
Set up a reminder schedule
Sometimes, a single email reminder can get lost in a crowded inbox. With brightwheel's invoicing feature, you can send automatic billing notifications for new invoices or past-due balances. This reduces manual work and helps eliminate late payments.
A consistent reminder schedule gives families advance notice and continues to remind them if a due date has passed. Here is an example of what your email reminder schedule might look like:
- Two weeks before payment is due
- One week before payment is due
- The day before payment is due
- On the due date
- One day after the due date
- One week after the due date
In addition to email, sending payment reminders via a childcare app like brightwheel is convenient for both you and the families. They can receive a notification on their mobile device and set up autopay directly in the app, saving you time and giving them flexibility.
Send an overdue invoice notice
Even with clear policies and multiple reminders, you may still encounter late payments. In these situations, send an overdue invoice letter. This communicates that payment is past due and creates a sense of urgency.
Make a phone call
Discussing payments over the phone can feel intimidating, but it can also help you understand a family's situation and find a solution together.
- Be polite and direct: When you call, be cordial and clearly state the reason for your call. Avoid an accusatory tone.
- Ask questions: Try to understand why the payment is late.
- Listen and summarize: Listen to their explanation and summarize any payment arrangement you agree upon before ending the call. If they don't answer, leave a brief voicemail and follow up with a text message.
Charge a late payment fee
Your payment policy can include a fee for late payments. Charging a late fee incentivizes families to pay on time. You can charge a one-time flat fee or a recurring daily fee until the payment is received.
Payment reminder template
When writing a payment reminder email, be polite, professional, and concise. Personalize the email with the family's name and include important details like the child's name, the amount due, the due date, and the required action.
Here is a sample payment reminder template you can adapt:
Subject: Payment Reminder: Invoice for [Child’s Name] - [Month, Year]
Dear [Parent's Name],
This is a friendly reminder from [Your Business Name] regarding the outstanding tuition fees for [Child’s Name] for [Month, Year]. The total amount due is [Amount].
A copy of the invoice is attached for your reference.
Please submit your payment of [Amount Due] by [Due Date]. If you have already made this payment, please disregard this email.
If you have any questions about your invoice, please let us know.
Thank you,
The [Your Business Name] Team
Payment reminder FAQs
How can I prevent late payments?
- Establish a clear payment policy: Ensure families understand due dates and late payment consequences.
- Send multiple reminders: A consistent schedule keeps payments top of mind.
- Charge late fees: This encourages on-time payments.
- Use billing software: A tool like brightwheel’s billing feature automates invoices and allows families to pay securely online.
- Request advance deposits: You might ask for a portion of the payment upfront as part of your policy.
- Make payments easy: Offering various payment methods simplifies the process for families.
- Communicate frequently: Regular updates build trust and make difficult conversations about payment easier to navigate.
Can I charge late payment fees?
Yes, charging a late fee is a standard business practice and can be an effective way to encourage families to pay on time. A typical late fee is around $25, but you can adjust this based on what works best for your program. You could also consider a daily fee, such as $5 for each day the payment is late.
What are some tips for writing a professional payment reminder email?
- Be timely: Send reminders before the due date and immediately after it passes.
- Use clear language: Use a simple subject line and attach the invoice, clearly stating the amount due and the deadline.
- Stay polite: A friendly tone can help you get invoices paid faster. Remind families of payment options and how to contact you with questions.
- Follow up with a phone call: If emails go unanswered, a phone call can add a sense of urgency.
What if someone refuses to pay an invoice?
If your attempts to collect payment have been unsuccessful, you have a few options. Each has pros and cons, so choose what is right for your program.
- Hire a collection agency: This service will work to retrieve the money for you, but they often charge a significant fee, sometimes up to 50% of the collected amount.
- Go to small claims court: Depending on the amount owed, legal action might be necessary. Keep in mind that this option involves legal fees.
- Refuse service: You have the option to stop providing childcare services until the outstanding payment is made.
Can I write off unpaid invoices on my taxes?
You may be able to write off unpaid invoices if specific requirements are met. The unpaid invoice must be recorded in your accounting books, and your business must use the accrual basis of accounting. You also need to demonstrate that you made reasonable attempts to collect the payment. Consult with a tax professional to understand your eligibility.
Make unpaid invoices a thing of the past
Sending a payment reminder is an important step in ensuring your childcare program gets paid on time. You provide a vital service, and you deserve to be paid promptly. With a clear payment policy, persistent yet polite reminders, and an efficient billing system, you can ensure your business gets paid on time, every time.
