Accounting Question

[Unregistered]

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.

I would do this also. I would print out an invoice to show the weeks and what's been paid and then a bill for the last week.

I went to weekly prepaid payments and LOVE it! The 5 week months I save for holidays!

[NillaWafers]

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.

I live in LA, and yes I know it's a low rate. I just got my license in Feb and had a terrible time getting kids, so I lowered it QUITE a bit. I am planning on raising rates around my one year anniversary.

I understand what you're saying, I've already sent the e-mail and don't want to appear wishy washy haha. I am fine with those 4 weeks right now, maybe I will re-write the contract in the future for newer parents. I don't really expect this family to stay past August of next year since DCB is 4 and will be going to TK most likely.

I do this on top of my husbands income so this income is really icing on the cake; they might know this - but I feel my low rate gives me a small advantage cus I know they won't find anywhere cheaper (that provides actual activities, food, and minimal TV).

I'm finding separating the business and personal aspect of this business exceedingly difficult haha. Especially when my kids are friends with the daycare kids, heh.

[mommyneedsadayoff]

I live in LA, and yes I know it's a low rate. I just got my license in Feb and had a terrible time getting kids, so I lowered it QUITE a bit. I am planning on raising rates around my one year anniversary.

I understand what you're saying, I've already sent the e-mail and don't want to appear wishy washy haha. I am fine with those 4 weeks right now, maybe I will re-write the contract in the future for newer parents. I don't really expect this family to stay past August of next year since DCB is 4 and will be going to TK most likely.

I do this on top of my husbands income so this income is really icing on the cake; they might know this - but I feel my low rate gives me a small advantage cus I know they won't find anywhere cheaper (that provides actual activities, food, and minimal TV).

I'm finding separating the business and personal aspect of this business exceedingly difficult haha. Especially when my kids are friends with the daycare kids, heh.

I understand and my only reason for posting is that you do not undervalue yourself. You are already offering a much lower rate than usual and to take another $500 off your yearly rate simply because they write one check a month instead of two, is something I just wanted to point out as short changing yourself. Taking care of kids is hard work and doing it for less than you are worth makes it that much tougher.

[Alwaysgreener]

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.

Ok so the logic behind this is that their is an extra week per month 4 x a year and you do monthly payments based on weeks. Huh
The way I see it is if you do monthly payments than it should be based on days not weeks, the weeks make it confusing.

A month of 30 days with 4 weekends leaves 22 working days based on your rate of 440 a month is 20 a day or 2 an hour (10 hours a day) - is this really your rate, 20 a day or 2 an hour?

Or did you mean to have your rate be 22 a day or 2.20 an hour?

At 22 a day, your monthly should be 484 a month.
(based on 23 working days at 22 a day, your monthly should be 506 a month)

Did you tell the families a daily rate or do you just say it is x monthly?

[NillaWafers]

It's 22/day (for potty trained preschoolers), so yes a small discount for paying monthly. Like I said above, I lowered my prices when I couldn't get a single kid in, I haven't even been open a year yet. I will be raising them to something more realistic in a few months. Right now I am pregnant, and probably sit too much (I am so TIRED) so not charging a lot makes me feel better about that. We do still do activities, but TIRED . I do charge quite a bit more for babies and toddlers.

I will be seeing this parent in a few minutes here so we'll see what she says. She sent me a text back saying she still didn't understand why she owed so I had to break it down to the dates she paid, and that bi-monthly isn't an option since we've been doing every two weeks. She said she'd look it over and talk about it this morning. Fingers crossed, I hate discussing money.

[mommyneedsadayoff]

It's 22/day (for potty trained preschoolers), so yes a small discount for paying monthly. Like I said above, I lowered my prices when I couldn't get a single kid in, I haven't even been open a year yet. I will be raising them to something more realistic in a few months. Right now I am pregnant, and probably sit too much (I am so TIRED) so not charging a lot makes me feel better about that. We do still do activities, but TIRED . I do charge quite a bit more for babies and toddlers.

I will be seeing this parent in a few minutes here so we'll see what she says. She sent me a text back saying she still didn't understand why she owed so I had to break it down to the dates she paid, and that bi-monthly isn't an option since we've been doing every two weeks. She said she'd look it over and talk about it this morning. Fingers crossed, I hate discussing money.

Keep us posted n how it goes! I totally get why you want to attract customers with a lower rate, but sometimes that lower rate attracts the wrong kind of customers, know what I mean? And if you figure it out for the year, you are not offering a small discount. You are basically working an entire month for free. ($110 x 52 weeks= $5720 $440 x 12= $5280, so a $440 difference, or an entire month free! )Again, I get why you are doing it, but I really cannot stress enough how important it is to be paid for the work you do when it comes to this job, or any job. Resentment builds so quick if you don't! Anyway, good luck and again, keep us posted on what dcm says! :hug:

[NillaWafers]

Keep us posted n how it goes! I totally get why you want to attract customers with a lower rate, but sometimes that lower rate attracts the wrong kind of customers, know what I mean? And if you figure it out for the year, you are not offering a small discount. You are basically working an entire month for free. ($110 x 52 weeks= $5720 $440 x 12= $5280, so a $440 difference, or an entire month free! )Again, I get why you are doing it, but I really cannot stress enough how important it is to be paid for the work you do when it comes to this job, or any job. Resentment builds so quick if you don't! Anyway, good luck and again, keep us posted on what dcm says! :hug:

It's definitely only temporary. We have put a lot of the money we earned back into our yard and house which has only improved my ability to recruit other families, our house was pretty beat down in the beginning.

DCM dropped off and I told her we'd discuss the payments at pick-up. It really does sound like she wants to pay bi-monthly, which is fine but it's gonna account for extra days. I do like the family, I am honestly just considering removing monthly payments as an option. It's more of a headache than it seems to be worth.

[Unregistered]

When I did monthly I figured their weekly rate and multiplied by 52 (weeks/yr) then divided by 12
If you keep them all year it works out $$wise. Otherwise some months you work more or less for the same amount. That's why I went to weekly.

[MarinaVanessa]

I don't do "monthly" payments for the very reason that parents have a hard time understanding why some months they pay more than others.

I just say "I charge $165 a week" and if they want to pay in advance then they can. SO if they want to pay 4 weeks at a time then they can pay $660 and it covers them for 4 weeks etc.

I'm pretty close to you (Ventura County) and you are definitely a lot less than I am. I suggest that when you raise your rates you raise them slightly per week for your current clients (but no more than $5 otherwise you may lose some clients) and then start new cients on the rate you actually want to be paid at. In another year raise the rate on your current clients again etc until they get caught up with the rest of your clients

[NillaWafers]

Ok so we discussed it, and what I will be doing is adding the business days for each month, multiply by 22, and divide by 2 for a bi-monthly payment. I won't be shorting myself. I also told her I'm eliminating monthly payments period - I think they're a big PITA now haha.

[spedmommy4]

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.

I agree with this. I have one family that pays monthly also. I took the weekly rate and divided it by five, then multiplied in by the number of care days in a month. The monthly tuition is different for them each month.

I don't care how a parent pays. I am not taking a loss. My bi-weekly parents pay every two weeks. No discounts.