How do you pay your CM?

[Aimarge]

I work for an amazing CM with 2 others so we have a lot of families.
This month only 25% of families paid on time. After Another email, only 2 more families have paid what is due. So we have more than 50% of charges outstanding.

So how do you pay your CM? Or if you are a CM how do your families charge you?

We do accept vouchers but for cash I suggested a standing order approach so parents can't forget. We have a penalty fine in place but no-one cares.
Would you be interested in say a weekly/ 4 weekly/ monthly standing order?
What sanctions have you got in place for late payers?
We have 1/2 price on days where we are not open (bank holidays and 2 weeks a year). Would you be happy being refunded at a later date if paying by standing order?

Payment in advance. No cash no care. Don't let anyone get in debt.

Pay in advance. No pay no play. I accept a range of payments and get paid on time. We do have a couple of parents that like a standing order.

And I send my invoices out 2 weeks in advance.

All my parents pay by bank transfer and then the majority have vouchers too. I get all the bank transfers and the majority of vouchers on time. Sodexo are the one company who I seem to struggle with and their money seems to take an age to reach me. But, the two families who use them, one is a close friend and I know she will pay me, even if it is a bit late and the other is really good in other ways (picking up early/dropping off late/lots of holiday/keeps ill child at home/paying cash bit early if I send my invoice early - which is really handy if we are short at the end of the month), so I accept that the vouchers coming in late although isn’t ideal, isn’t a massive problem in the great scheme of things (however if it were more of my income it would cause an issue).
For one of my families, (full time, two dc), I’ve worked out their bill, so they pay the same each month, which means they aren’t late paying me now (when it was different, they were frequently late) so the standing order thing might work. And, are your late fees high enough, if parents don’t care about paying them, it might be that if you put them higher, they won’t want to be stung so will sort their bill out on time.

Invoiced 2 weeks before payment due date. I generally do a bank transfer as soon as I get the invoice but last month it totally slipped my mind and I had a text the day that payment was due to say "just to remind you that fees are due today" and I paid immediately. I'd be absolutely mortified to pay late!

I loved our fab childminder.

Our invoice was a post it note with the rate worked out.
In the next day or two we just stumped up a cheque to pay her.

Quite relaxed, but we were only ever a day or two late paying after receiving the post it invoice. :)

Thank you all so much. She's decided to do next month's invoice in the middle of the month. Text the parents on the 1st who haven't paid and text reminders until the "No pay No play" rule.

DrMadelineMaxwell .....wow she let you pay late then by cheque that would have had to wait for her to manage to get to a bank plus clearing time how on earth does anyone survive waiting 2 weeks for their salary? I hope you really appreciated what a push over she was being.

My husband and I both have voucher payments and then we have a standing order for the remaining amount that is paid on the first of the month. I like to make sure it all happens on the very first day it is due.

Voucher payment set up monthly and then a standing order for the topup amount needed. I’d be mortified if I was late!

Direct debit. Any ad hoc paid immediately after

I know how frustrating late payments can be, but I do find many childminders' approach to thesubject utterly baffling and not at all businesslike.

If on-the-dot payment is critical, then insist on direct debit arrangements through a business bank account. There are also specialist services like Gocardless who can set this up, but I’ve no experience with any of these.

In the absence of a proper business account, then have a standing order set up for a certain amount and let them top up the balance by BACS/faster payment transfer. That way, you have the bulk of money in on time, to the point where you shouldn’t notice any true cash flow problems.

Above all, never invoice in arrears, and always take a month's non-refundable deposit up front. That way, you can at least cut your losses if you need to give notice to a serial bad payer.

There’s not much you can do about the inevitable time lag with childcare vouchers, which is more the fault of the our own retail banks than the voucher providers. It’s not really any different to the delay a shop experiences in getting real money when you or I pay by credit card.

I wouldn’t recommend a 'no pay, no play' policy. Yes, it can work. But it can also be like hitting the self-destruct button. I know some CMs who swore by this approach, only to find it utterly decimated their businesses. I guess it depends on circumstances, but it's definitely taking a sledgehammer to a nut and can be very damaging.

Similarly, be very careful with late payment fees. They are quite easy for a client to challenge if they decide to get legal over it. The percentage of permissible charge is so small as to be unworthwhile bothering with.

In what way would it decimate a business? I don't know any childminders who let non-payers keep attending.

I know CMs who refused care because parents were a few days late in payment. Tbf it was in their policies, contracts, etc and they issued fair warning, but they crossed a line when they turned mums away at the door.

Word got round very quickly and it absolutely wrecked their reputations. Some other parents gave notice and they couldn’t fill those vacancies because they were perceived as 'uncaring'. They really struggled to get enquiries for a long time which hit their businesses badly. They pretty much had to start again and rebuild from the bottom.

It’s a shame the judgement isn’t left for the people who can’t pay their bills on time. How disrespectful.

I use vouchers and have set it up to pay automatically every Monday.

When DD was there ft and therefore cost more than our vouchers we had a standing order set up to pay every Monday.

It was really convenient and meant I didn't forget to go to the bank, etc.

Don’t get me wrong. I thing it’s quite despicable to pay late, especially when it’s someone who give it all the sentimental claptrap "my baby is my life" but they'd rather prioritise paying for luxuries and new 'phones, etc. They justly deserve to be turned away at the door, but it's a risky thing to do.

Unfortunately people have got used to paying late for a lot of things, and that very seldom means a service is immediately withdrawn. CMs do need to be aware of the sensitivity of this, and just how vital it is to maintain a good reputation.

My guess is that the likely effects could well depend on the balance of supply and demand in any particular locale. Parents can be more fussy where they have more opportunity to choose between providers.

At the heart of this is the sad fact that CMs are very ill-served in terms of business training and how to see this sort of issue in proportion and deal with it in a more businesslike way.

I use the gov childcare account. You can just set it up to pay every week on a day or whatever. Much easier for me.

That sounds very odd itsaboojum, must be something particular to your area.

itsaboojum Thu 10-Jan-19 19:22:40

"I know CMs who refused care because parents were a few days late in payment. Tbf it was in their policies, contracts, etc and they issued fair warning, but they crossed a line when they turned mums away at the door.

Word got round very quickly and it absolutely wrecked their reputations. Some other parents gave notice and they couldn’t fill those vacancies because they were perceived as 'uncaring'. They really struggled to get enquiries for a long time which hit their businesses badly. They pretty much had to start again and rebuild from the bottom."

So word got out from the late payers that we pay are bills late and the nasty childminder wouldn't take in my lo although I hadn't paid?????? I think it was probably a bit more bad mouthing and false stories than that.
I know cm's who put up with late payments then the payments get later and later and the parents book holidays, pay for luxury items, post about weekends away but haven't paid their childcare leaving childmidners cancelling own childs party, own holiday, shopping etc. Late payment is not acceptable and the only way to stop it is to be firm from day one no pay no care.

Payment is part of the contract by not paying on the agreed date the parent is committing a major breech of contract. The other party can terminate immediately for lack of payment without their being any clauses or policy about it.

It’s difficult, because occasionally shit does happen. DH is self employed: somebody hasn’t paid him this month. If a CM refused care it would be a destructive cycle where the parent can’t work and thus can’t pay the fees and so on.

Oceanfive - If that happened you would talk to your cm as soon as you know and if it were a one off most of us would try to help, but at the end of the day by you not getting paid you pass the problem to another self employed person who in the mean time is supposed to feed the children on thin air and cant pay their mortgage etc.

Payment on 1st of the month for the month ahead, with overtime added to the following month. No money on 1st = no childcare on 2nd.