Interesting Twist On Late Payment Policy

[MyAngels]

I was reading the thread about the late payment policy, and was thinking about how a different kind of "late payment policy" might work.

My daughter just signed a new lease and her landlord doesn't charge a late fee at all, but he does give an "on time discount." Her rent is $900 per month. If she pays by the 1st, he gives her a "discount" of $50 per month, so $850.

I was thinking that a daycare provider could do the same type of thing. Let's say the amount you would like to receive per spot is $150 per week. You could charge $175 per week, with a $25 "on time discount" if the fee is paid by Monday morning. Monday afternoon the rate goes to $175. Everybody loves to get a discount, right?

Help me brainstorm this - upsides, downsides, etc. I don't have a problem with late payers (I don't even have a late fee ), so I'm sure I'm not thinking of something here...

[SandeeAR]

Not a bad idea.

[missnikki]

What happens if they don't pay for a more extended amount of time? Or has outstanding debt for early term, for example?

[dEHmom]

Wow that's an awesome idea!
Point here is that everyone likes to feel like they are getting something for nothing! LOL.

You know you're getting your full rate, and ontime too.
Parents are thinking they are getting a "discount" even though they are not!

Awesome! I'm totally stealing this, unless in the next day there are a million negative posts about it.

You'll have to be more specific in terms of how much it'll adjust the rate for every day it is late.

[missnikki]

It also helps to give the parents 'postitive reinforcement' like we do with their kids all the time. I like that idea a lot. I do that with my annual registration, but not my fees.

[MyAngels]

What happens if they don't pay for a more extended amount of time? Or has outstanding debt for early term, for example?

I think the early termination would fall under another aspect of your contract. I have a clause that they give two weeks notice for termination and will pay the daycare fee whether they are here or not. If they give notice, and pre-pay, they would owe $300, if not, and I have to pursue it would be $350, plus costs and attorney's fees.

I think if I were going to add this to my contract I would add that, if payment in full were not received by Friday that care will not continue until payment is received - the "no pay, no stay" policy that I see others here use.

[Blackcat31]

It is a nice idea but why are we brainstorming to figure out ways to get adults to do what is their responsibility in the first place? It is sort of sad that we are trying to come up with creative ways to get parents to pay for services they sought out and agreed to....not like the electric company gives discounts because I paid on their due date. If I don't pay I don't get electricity.....pretty elementary to me.
I realize that late payments are a problem but really it is a problem because WE (the providers) are allowing it to be a problem. We have our reasons like we can't afford to term or because we really like this family and don't want to lose them etc etc. but bottom line is we gotta do what we gotta do and if that means letting the parents slide on timely payments then that is our fault. I do have to say that I did initiate the NO PAY/NO STAY policy, I was terrified that I would lose families (i.e $$$$) but if WE enforced our policies as we set them, we wouldn't have issues. Since I started the NO PAY/NO STAY rule I have not had one single late or missed payment so IT DOES WORK but only because I also added NO EXCUSES and then enforced it. I know it is hard to take the human side of this job out of it but either we take it for what it is or we make policies and stick to them.

[dEHmom]

It is a nice idea but why are we brainstorming to figure out ways to get adults to do what is their responsibility in the first place? It is sort of sad that we are trying to come up with creative ways to get parents to pay for services they sought out and agreed to....not like the electric company gives discounts because I paid on their due date. If I don't pay I don't get electricity.....pretty elementary to me.
I realize that late payments are a problem but really it is a problem because WE (the providers) are allowing it to be a problem. We have our reasons like we can't afford to term or because we really like this family and don't want to lose them etc etc. but bottom line is we gotta do what we gotta do and if that means letting the parents slide on timely payments then that is our fault. I do have to say that I did initiate the NO PAY/NO STAY policy, I was terrified that I would lose families (i.e $$$$) but if WE enforced our policies as we set them, we wouldn't have issues. Since I started the NO PAY/NO STAY rule I have not had one single late or missed payment so IT DOES WORK but only because I also added NO EXCUSES and then enforced it. I know it is hard to take the human side of this job out of it but either we take it for what it is or we make policies and stick to them.

Good point blackcat, but I see it like this....

Parents will feel they are getting "Better" service from you if they think they are getting a discount. They will be less likely to decide to look elsewhere.

If you could go to walmart and buy a camera for 139.99 but sears had it on sale for the exact same camera for 139.99 but it came with a camera case, would you be more likely to go to sears?

[Blackcat31]

Good point blackcat, but I see it like this....

Parents will feel they are getting "Better" service from you if they think they are getting a discount. They will be less likely to decide to look elsewhere.

If you could go to walmart and buy a camera for 139.99 but sears had it on sale for the exact same camera for 139.99 but it came with a camera case, would you be more likely to go to sears?

Yes, but I don't want the parents who are shopping for the best deal...I want the parents who are shopping for the best care. I buy cameras based on what features they have or features I want regardless of costs not the camera that is cheapest. I don't see how getting a case with the camera vs just the camera is the same as getting a discount? I would however, go to Sears if they gave me a better warranty for the same price. kwim?

[dEHmom]

Lol, yeah I never thought that thru with the camera thing, I was just trying to state that you can get the same product, for the same price, but if it has some sort of incentive it's much more appealing.

I agree that you want parents who choose better care over price, but to draw parents to your care you have to have something attract them. They won't truly know if you're offering the best care, or blowing smoke, until they've chosen you and given you a chance. KWIM? yay first time I've known what that meant so first time i can use it!

[Blackcat31]

Lol, yeah I never thought that thru with the camera thing, I was just trying to state that you can get the same product, for the same price, but if it has some sort of incentive it's much more appealing.

I agree that you want parents who choose better care over price, but to draw parents to your care you have to have something attract them. They won't truly know if you're offering the best care, or blowing smoke, until they've chosen you and given you a chance. KWIM? yay first time I've known what that meant so first time i can use it!

You are right, but again, after being in the business for a while and building a reputation for giving and expecting respect in BOTH directions you don't NEED to lure any clients in, they come to you because they know from word of mouth or past history of the kind of services you provide. So on one hand I totally understand trying to get new clients and setting ourselves apart form others but if we lure people in with gimmicks and special treatments then they will expect gimmicks and special treatment the entire working relationship and that is a part of the forest that I choose not to play in....

Oh, and it took me alot of researching until I found the thread about what all the acronyms meant too....LOL! I had a tough time with IMHO....took me a while! LOL!!

[dEHmom]

I'm struggling to fill my spot. I'm newer and not licensed. I have licensed friends but they cannot promote my daycare or advise to come here. I offer pretty close to what the licensed providers charge. I live in a smaller community, and everyone either has too many kids that I can't take them on, or they aren't due until spring/summer. So its really hard for me. My hubby is definitely the bread winner, but we are struggling to make it from pay cheque to pay cheque. He makes decent money but being house broke, and debt going nowhere, it's tough. We've even thought of bankruptcy :S

[dEHmom]

Oh, and it took me alot of researching until I found the thread about what all the acronyms meant too....LOL! I had a tough time with IMHO....took me a while! LOL!!

Now you're messing with me! IMHO? IMO In my opinion wth is the H?

[Blackcat31]

Now you're messing with me! IMHO? IMO In my opinion wth is the H?

:: LOL!!! H is honest or humble. In My Honest Opinion.......

[dEHmom]

:: LOL!!! H is honest or humble. In My Honest Opinion.......

Oh, whew see I thought maybe Hormonal! LOL I think we all get a little hormonal sometimes and have to share our opinions. .