Why Staying on Top of Fees Is Essential for Your Business

Running an early years childcare setting is one of the most rewarding—and challenging—jobs out there.

You nurture young minds, provide a safe and engaging environment, and support families in their daily lives.

But behind the scenes, you're also running a business. And like any business, consistent cash flow is critical.

One of the biggest threats to your financial health? Unpaid fees.

The Hidden Costs of Bad Debt

Letting unpaid fees pile up isn’t just a paperwork headache. It can have a real impact on the sustainability of your service. Here’s how:

• Cash flow problems – If families aren’t paying on time, you may find yourself struggling to cover operational costs like staff wages, supplies, rent, and food.

  
  

• Administrative burden – Chasing late payments takes time and energy—time you could spend improving your service or supporting your team.

  
  

• Emotional toll – Addressing unpaid invoices can feel uncomfortable, especially in a setting where strong relationships with families are essential.

Why Fee Management Should Be a Priority

Being proactive about managing fees doesn’t mean being inflexible or unsympathetic. It means protecting your business so you can continue providing excellent care.

Here are a few reasons to make fee management a core part of your operations:

1. You’re Providing a Valuable Service

Childcare is essential, and your service is built on professionalism and trust. Expecting timely payments reflects the value of what you offer—and sets clear expectations with parents.

2. Small Debts Add Up Fast

What starts as a missed payment one month can quickly spiral. A few outstanding invoices across multiple families can add up to hundreds or even thousands in bad debt if left unchecked.

3. Predictability and Planning

A consistent income stream allows you to plan ahead—whether you’re investing in new resources, expanding your team, or simply keeping the lights on. Late payments throw those plans into chaos.

4. Fairness to Other Families

Families who pay on time shouldn’t be subsidising those who don’t. Being firm but fair helps maintain equity in your community and ensures you can continue offering quality care.

Tips for Staying on Top of Childcare Fees

• Have a clear, written policy – Make sure all families understand your payment terms from the start. Include due dates, accepted payment methods, and consequences for late payments.

  
  

• Use automated systems – Childcare management software can help you send automatic reminders and track who’s paid (and who hasn’t).

  
  

• Communicate early and often – If a payment is missed, follow up quickly and professionally. In many cases, a simple reminder is all it takes. Try my outstanding fees letters as a starting point for difficult discussions.

  
  

• Offer payment plans if appropriate – Life happens. If a family is going through hardship, a structured payment plan can help you recover fees without adding unnecessary stress.

  
  

• Don’t let it slide – It’s tempting to “wait and see,” especially when you have a good relationship with the family. But delayed action often leads to bigger problems down the road.

Protecting Your Service—and Your Peace of Mind

You provide a vital service, and that deserves to be compensated fairly and consistently. By being proactive, setting clear expectations, and enforcing your policies kindly but firmly, you protect your business, your team, and your families.

Ultimately, managing childcare fees effectively isn’t about being harsh—it’s about being sustainable. Because when your business is strong, everyone benefits.