Got A New Client, Wants A New Way To Pay, Need Help With Contract

[Abigail]

How temporary is this? You should call and speak directly with his company because they have probably done this before with other providers. When you call and speak to them, you are also verifying it is a true place of employment as well.

I would have the parents pay a two-week deposit up front to be reimbursed at the end of the contract. I would require they pay you on time to avoid late fees (even if it's out of pocket) and then you can give them back anything they're over if it works out that way.

[Sunshine44]

I say the parents pay you and if their work is willing to pay, then they take that to reimburse themselves...you shouldn't agree to anything with another party paying you like that.

[bgmeyers]

I have a family that does this. I invoice the parents well in advance (like two weeks). Dad gives it to payroll and then I get a check in the mail. I get paid monthly. Been doing it for years. Works like a charm.
Contract states any late fees are paid by the parents in cash, but these parents have never been late for anything, so it's a non issue.

[Unregistered]

I had this and it was a disaster. Mom claimed she had no control over it and couldn't even tell me when I was to get paid. I termed after a couple months of only pt care b/c it was such a headache.

[heyhun77]

While it's possible that their company runs their FSA this way it's also possible that they are misunderstanding how it works. As others have advised I would contact their company to confirm that this is how they want to do it and then what their procedures are for payment.

As far as the contract the only thing I would do is to make an amendment in the payment section that you will submit the invoices to their company for payment but that if payment is not received by the due date that the parents must pay for it and when payment arrives it will be credited to future fees. If you make sure that the parents still know they are responsible for payment they will stay on top of it.

[nannyde]

I had this and it was a disaster. Mom claimed she had no control over it and couldn't even tell me when I was to get paid. I termed after a couple months of only pt care b/c it was such a headache.

I have seen a few providers (including centers) who have done this and the company processing the payments started bouncing checks. It can add up REALLY quickly and the parents can be very upset when they realize they have to fight to get the money back.

[MN Day Mom]

To possibly avoid disaster could you get the dcp to pay you and then when your check comes from their company you reimburse them... this way the risk is always on them and not on you??

[My Daycare]

I have 3 parents that do this. My parents have to set it up so that the money is due about a week before it really is, or else the payment is late. Now that it is all straightened out I get my checks in the mail on Saturdays and payment is due the coming Monday.

The only time there is a problem is when they have to change something for a holiday (I don't charge holidays) then it takes some time for the company that pays to get on track again. When I don't get my checks by Monday's my parents write me a check, so I always get paid on time.

As long as they are willing to work with you, and not blame things on the check writing company than you should be OK. Just don't let them make it your problem.

[Meyou]

Uuugh, this sounds messy. :S

Personally, I would talk to the company and whomever pays the bills DIRECTLY if they want you to be paid directly. Talk to the person who cuts the cheques and processes the invoices...not the boss...the person who places their hands on the paperwork and find out what the REAL terms of payment are. Some companies have an automatic 30 or 60 day hold on certain types of invoices. It's financially profitable for them to hold onto them for 2 months and pay a late fee while the money for the bill collects interest in the back. (I worked for a company like this)

Ask the bookkeeper everything you need to know:

Can the parents pay directly and be reembersed?
If so, what exactly do they need to do?
If not then....
How long from date of receipt of invoice to cheque in the mail?
How far in advance should you have the invoice in their hands to make sure you get payment BY your DUE DATE?
Would a lump sum invoice for the total amount be easier since it's temp care?

You should invoice for the first two months in advance due when the child starts regardless of what the payment terms are. Companies are used to quick turnover in invoices for startup costs and can push a cheque through for your intial fees so you don't have to wait for your money.

I would be very clear in my contract that PARENTS are responsible for late payment providing you submit invoices in a timely fashion according to the companies policy.

I would NEVER EVER EVER take a parents word about what a company is going to do regarding invoice payment. If the company is paying me I would have to talk to the company myself. It's my business and ultimately my responsibility that I dot my I's and cross my T's.

[daycare]

Uuugh, this sounds messy. :S

Personally, I would talk to the company and whomever pays the bills DIRECTLY if they want you to be paid directly. Talk to the person who cuts the cheques and processes the invoices...not the boss...the person who places their hands on the paperwork and find out what the REAL terms of payment are. Some companies have an automatic 30 or 60 day hold on certain types of invoices. It's financially profitable for them to hold onto them for 2 months and pay a late fee while the money for the bill collects interest in the back. (I worked for a company like this)

Ask the bookkeeper everything you need to know:

Can the parents pay directly and be reembersed?
If so, what exactly do they need to do?
If not then....
How long from date of receipt of invoice to cheque in the mail?
How far in advance should you have the invoice in their hands to make sure you get payment BY your DUE DATE?
Would a lump sum invoice for the total amount be easier since it's temp care?

You should invoice for the first two months in advance due when the child starts regardless of what the payment terms are. Companies are used to quick turnover in invoices for startup costs and can push a cheque through for your intial fees so you don't have to wait for your money.

I would be very clear in my contract that PARENTS are responsible for late payment providing you submit invoices in a timely fashion according to the companies policy.

I would NEVER EVER EVER take a parents word about what a company is going to do regarding invoice payment. If the company is paying me I would have to talk to the company myself. It's my business and ultimately my responsibility that I dot my I's and cross my T's.

So I talked to the mom today and told her that I have never taken 3rd party checks before and that I was not sure how to go about it. I decided that I will write a contract which states differently than the current ones. I also have to play a roll in making sure that I invoice on time and need to be fair. So if I don't invoice by a certain date, then it will be my fault that I dont get paid on time.. UGH just one more thing for me to have to do.
I asked if there was a way that they could pay me direct and the DCD said this is just the way the company does it. If they pay him they have to tax him. UGH so it looks like I will be having to figure this out. I think that if I do it for months in advance, I will be ok. Thanks for giving that advice, I know that when you are dealing with another party involving payemnts, things can get crazy.

Not looking forward to this, but I thought about it and it is some what similar of how state pay is done here, so I think I will survive...

Thanks for all of the advice..

[Lucy]

Haven't read the other replies, so don't know if something like this has been mentioned.

I would have the parents give you a check for one month's care. Tell them you will HOLD the check. You can even tape it to the wall or something so they see you're holding it. If one month of care goes by and you haven't seen a check from the employer, you cash the parents' check.