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Whether you’re in England and dealing with April’s new funding changes, or you’re a setting in the rest of the UK exploring how funding works for you, it can be a lot to get your head around.
You might be working on paper, or spreadsheets with clever formulas, but both of these can become easily overwhelming without a central software system, or the support of a finance consultant!
Blossom recently partnered with MBK Group to develop a free funding gap calculator for you to use and explore what funding means for your nursery business. But how exactly can nursery management software help your nursery finances?
As soon as you have more than one spreadsheet with financial information on it, you no longer have a trustworthy source of truth. Adding the words MASTER or FINAL quickly become meaningless. What’s better – and used by almost every business out there – is accounting software, and good nursery management software comes with this as standard.
Accounting software in a nursery management system is tied directly to the children (and their guardians) that are loaded into it. Generate an invoice, and it’s linked straight to the person for whom the services were provided, putting their account in debit. Rather than going line by line in a spreadsheet, this account information can’t be misapplied to the wrong person.
This is particularly important if some children are claiming funded hours and others aren’t.
From there, when the invoice is settled it’s applied back to the right person every time. There’s almost always a homepage to show you every child’s account at a glance, meaning it’ll be easy to spot if someone needs a gentle reminder.
Speaking of which – what do you do if you forget to mention overdue payments at pickup?
Unless you’re particularly savvy with Outlook or have an advanced mailing system at your fingertips, sending reminders for payments is a manual task. Send invoice, check bank, check calendar, send reminder, check bank account, send reminder – that list can get surprisingly long, surprisingly quickly.
Through nursery management software, those reminders can be as simple as one initial setup. Choose how long you want to leave payments before chasing, and the system will always follow up without you having to lift a finger. You can even run reports to see which ones are missing and know the reminders have already been sent, as well as separate the straightforward accounts from the ones often sliding (taking you with them) into debt.
No-one likes chasing payments, so it’s easiest to let nursery management software do it for you!
While nursery management software can’t be a crystal ball (or study external PEST/PESTLE factors), it can certainly predict how you’re likely to perform from how you’ve performed previously. As long as your booking patterns are set up and children are applied to them, nursery management software can tell you how much you’ll earn from the families you already have.
With the age information included, you’ll even be able to predict drop offs from school leavers, and you can prepare an enquiry campaign to plug the upcoming gap. While you might think this is easily predictable based on term times (expect drop off in September), remember that childcare funding isn’t based on starting school – it’s based on the child’s age.
To make sure you get all the payments you’re due from the Local Authority and don’t give parents something they’re not entitled to, as well as get enquiries when you need them, use nursery management software that includes all of it.
The financial side of funding has two parts to it. What the parent pays (or doesn’t), and what your Local Authority gives you for providing it. While you can set up whatever packages you need in nursery management software, it’s good to reach out to experts like Tricia at MBK Group to help you identify what those packages should look like.
Once those packages are in place, your nursery management software will do everything you need behind the scenes. It’ll make sure parents are charged and invoiced the right amount – even if it’s zero – and give you the exports and reports that the Local Authority need to reimburse what you’re owed.
Without it, you’ll have to be absolutely certain your spreadsheets or paper records are up to scratch. The Local Authority will always pay you for what you can prove, but there will be a statute of limitations on how late you can be with your records. The longer those records (and thus payments) are delayed, the faster your books will slip towards the red.
Don’t forget to check out the nursery funding gap calculator to gain a quick overview of how funding affects your setting!
If you’re not using nursery management software, be extra careful not to miss anything in your financial analysis. As soon as you have multiple sources of financial information, things start to get complicated, while nursery management software is designed to offer clarity.
If you’re constantly chasing payments, look to automate them however you can. If you can’t accurately predict how your setting will perform next month, use a tool that can do that analysis for you.
And above all, if you’re providing funded childcare hours, make sure you’re tracking everything from the word go and have calculated the likely impact. And wouldn’t you know it – nursery management software can do it all.
If you’d like to explore an all-in-one nursery management software platform designed by nursery owners with brand-new funding features, reach out to Blossom and get yourself a free no-obligation demo to see all of its finance and diary systems in action. If funding’s your focus, check out our expert funding support to make funding work for you.
Author: Stuart Thomas
Stuart is Content Manager for Blossom, with over 10 years’ commercial writing experience across a number of industries from national sports to education providers. At Blossom his focus is on Early Years topics and insights, along with how software can make life easier for nursery owners, managers, practitioners and even parents.
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