Accounting Question

[NillaWafers]

Ok, so I have a DCM that originally signed up to pay a certain amount monthly. About halfway through she asked if she could pay every two weeks. I was totally fine with this and they have been pretty good about getting paid on time.

The last check I got from her was the 12th. Would you assume that the payment was due Monday (today)? Or next Monday. I thought it was due today and asked her for it since it had been two weeks, she said she thought she was paid for the month. I realize this is because there is a 5th week in October.

My thinking of this was if you're gonna pay monthly you get that extra week - that's the benefit of paying ahead of time. If you're going to do every two weeks then it needs to be every two, not just skipping to three when there is an extra week in the month.

Maybe she told me bi-monthly and it got lost in the mix. I made the mistake of not re-doing their contract when the payment plan changed. So many noob mistakes on my behalf.

[Michael]

We had a similar question about bi-weekly payments previously: https://www.daycare.com/forum/showthread.php?t=50122

[daycarediva]

redo her contract asap!

My parents who pay bi-weekly pay every other Friday. If she pays on Mondays and paid you the 12th, it would be due again the 26th. I wouldn't allow bimonthly payments, that would give her a free week when there are 5 weeks (and I am SURE that's what she was hoping for).

New contract, two payment options outlined.

1. Pay monthly for the full invoice amount of X due on the first of every month.

2. Pay bi-weekly, on Monday, due every other week in the amount of X.

Yup, you got shorted.

[Alwaysgreener]

Ok, so I have a DCM that originally signed up to pay a certain amount monthly. About halfway through she asked if she could pay every two weeks. I was totally fine with this and they have been pretty good about getting paid on time.

The last check I got from her was the 12th. Would you assume that the payment was due Monday (today)? Or next Monday. I thought it was due today and asked her for it since it had been two weeks, she said she thought she was paid for the month. I realize this is because there is a 5th week in October.

My thinking of this was if you're gonna pay monthly you get that extra week - that's the benefit of paying ahead of time. If you're going to do every two weeks then it needs to be every two, not just skipping to three when there is an extra week in the month.

Maybe she told me bi-monthly and it got lost in the mix. I made the mistake of not re-doing their contract when the payment plan changed. So many noob mistakes on my behalf.

I am confused does the contract say bi monthly or every 2 weeks. How is it written?

[mommyneedsadayoff]

I don't understand this question. Paying every two weeks has nothing to do with the month. Every two weeks, she drops a check for the next two weeks, regardless of what month it is. If she wants to pay twice a month, then you take her monthly fee and spilt it in two. The first one is due on the 1st (or last day of the month), the second is due on the 15th. Not sure if this helps, because I am not understanding why she thinks she would get any week free? On months with five weeks, she will just be writing 3 checks, versus two, and that third check will cover the first week of the next month.

Just to add that if she paid on the 12th, she owes yesterday, the 26th. Then Nov 9th, 23rd, ect.

The only way she is paid for the month is if the check from the 12th included 3 weeks. After reading your post again, did you take her monthly fee and split it in two? If so, then she paid twice this month, which would be bimonthly payments, not paying every two weeks. In that case, she would be paid for the month. If you took her monthly payment and divided it into a weekly rate and she pays that two weeks at a time, then she would owe for the next two weeks. Hope that makes sense

[MyAngels]

My thinking of this was if you're gonna pay monthly you get that extra week - that's the benefit of paying ahead of time.

Does this mean that you are giving away 4 free weeks per year if they pay 4 weeks at the beginning of each month, or am I just confused?

[Unregistered]

Weekly is different than bi-monthly. Bi-monthly would need to be figured each month.

[Thriftylady]

Does this mean that you are giving away 4 free weeks per year if they pay 4 weeks at the beginning of each month, or am I just confused?

I think that is what she is saying, kind of a pre-pay discount of sorts. I could see me doing that, because having the month's tuition at the start of the month would go a long ways towards paying the rent.

[NillaWafers]

I think that is what she is saying, kind of a pre-pay discount of sorts. I could see me doing that, because having the month's tuition at the start of the month would go a long ways towards paying the rent.

Yeah my monthly rate is flat. It doesn't change depending on the weeks in the month. When we switched to every other week I was assuming she knew that she would be losing that. Apparently not - she says she said bi-monthly and not every other. So yes I am missing out on a weeks pay this week but I kinda backed myself into this corner by not immediately redoing her contract. A big woulda shoulda coulda. Next time will be different.

[Blackcat31]

Yeah my monthly rate is flat. It doesn't change depending on the weeks in the month. When we switched to every other week I was assuming she knew that she would be losing that. Apparently not - she says she said bi-monthly and not every other. So yes I am missing out on a weeks pay this week but I kinda backed myself into this corner by not immediately redoing her contract. A big woulda shoulda coulda. Next time will be different.

Um, no....I would not simply accept the loss and call it a "shoulda, coulda, woulda" lesson.

I'd straight up say "DCM, I misunderstood and thought you meant bi-weekly payments which of course mean you lose out on the savings but I am not willing to accept bi-monthly payments as it does not work for me."

As a self-employed business owner you don't have to accept anything....You CAN and SHOULD amend your agreement now and not take ANY loss in regards to this family.

[daycarediva]

Um, no....I would not simply accept the loss and call it a "shoulda, coulda, woulda" lesson.

I'd straight up say "DCM, I misunderstood and thought you meant bi-weekly payments which of course mean you lose out on the savings but I am not willing to accept bi-monthly payments as it does not work for me."

As a self-employed business owner you don't have to accept anything....You CAN and SHOULD amend your agreement now and not take ANY loss in regards to this family.

Agreed. I would tell her she owes X for this week due immediately. Give her a NEW biweekly rate OR allow her to go back to monthly payments. No way would I take a loss like that.

[NillaWafers]

I guess I should grow a pair

I will be sending her this e-mail today, how does it sound?

Hello there,
I should have re-done your contract when you said you wanted to pay every two weeks. Unfortunately, I didn't realize you meant bi-monthly payments and not every two weeks. I am offering you three payment choices:

a) Monthly payments of $440/month, due on the first Monday of the month. This includes 4 and 5 week months. This is a small discount for paying a month ahead of time.

b) Bi-Monthly payments, due on the 1st and 15th of the month. This will change depending on 4 week ($220) or 5 ($275) week months.

c) Bi-Weekly payments of $220, due every other week on Monday.

Please let me know which will suit you better, and I'll get the new contract written up and ready for you to sign. Thanks!

ETA: I probably should say something about her owing for this week regardless I suppose.

[Blackcat31]

I guess I should grow a pair

I will be sending her this e-mail today, how does it sound?

Hello there,
I should have re-done your contract when you said you wanted to pay every two weeks. Unfortunately, I didn't realize you meant bi-monthly payments and not every two weeks. I am offering you three payment choices:

a) Monthly payments of $440/month, due on the first Monday of the month. This includes 4 and 5 week months. This is a small discount for paying a month ahead of time.

b) Bi-Monthly payments, due on the 1st and 15th of the month. This will change depending on 4 week ($220) or 5 ($275) week months.

c) Bi-Weekly payments of $220, due every other week on Monday.

Please let me know which will suit you better, and I'll get the new contract written up and ready for you to sign. Thanks!

ETA: I probably should say something about her owing for this week regardless I suppose.

YES!!

I like the e-mail you have already but I would definitely add something like "There is also a fee of $X amount due for services this week as it was not accounted for when the request for a different payment schedule was made"

I guarantee you that DCM does not work a single hour/day without being compensated for so why should you?

[NillaWafers]

I just wrote in the email, "Since we are re-doing the contract, this week's tuition is due regardless ($110). We will start the new contract effective November 2nd, 2015."

I should have done that immediately. I just didn't realize she meant twice a month not every two weeks. Sigh. I hope it goes smoothly.

[mommyneedsadayoff]

I guess I should grow a pair

I will be sending her this e-mail today, how does it sound?

Hello there,
I should have re-done your contract when you said you wanted to pay every two weeks. Unfortunately, I didn't realize you meant bi-monthly payments and not every two weeks. I am offering you three payment choices:

a) Monthly payments of $440/month, due on the first Monday of the month. This includes 4 and 5 week months. This is a small discount for paying a month ahead of time.

b) Bi-Monthly payments, due on the 1st and 15th of the month. This will change depending on 4 week ($220) or 5 ($275) week months.

c) Bi-Weekly payments of $220, due every other week on Monday.

Please let me know which will suit you better, and I'll get the new contract written up and ready for you to sign. Thanks!

ETA: I probably should say something about her owing for this week regardless I suppose.

I don't think you should send all this. I would simply say that your rate is $110 a week and payment is expected every two weeks. It sounds too complicated. I don't know your area, but in CA, to only charge $110 a week is a very low rate, so don't give them free weeks if they pay a month at a time. I don't get a reduced rate in my electric if I pay in advance. DON"T SHORT CHANGE YOURSELF! You don't control the amount of weeks there are in a month and you shouldn't have to work for free, simply because one month has 5 weeks instead of 4. I would just say:
"Dcm, if you want to pay two weeks at a time, your rate is $220, due on Monday, every two weeks, starting X date." If she wants to pay monthly, it is $477 a month ($110x52=5720/12=$477). Do not give deals based on how they pay. I know some do, but I would not! It brings down your overall earnings ad you deserve to make a steady rate.