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Q: As a home daycare provider how should I handle parent payment problems? ( Answered,   4 Comments )
Subject: As a home daycare provider how should I handle parent payment problems?
Category: Business and Money > Small Businesses
Asked by: littlebird75-ga
List Price: $2.00
Posted: 09 Mar 2005 11:35 PST
Expires: 08 Apr 2005 12:35 PDT
Question ID: 489800
As a home daycare provider I rely on the income from daycare parents.
I have a contract, but sometimes parents still don't pay. I have
terminated care for non payment. After that, getting paid seems
impossible. I want to list these parents in the credit bureaus, but I
don't know how.
Subject: Re: As a home daycare provider how should I handle parent payment problems?
Answered By: taxmama-ga on 14 Mar 2005 06:37 PST
Dear Little Bird,

You're getting some pretty decent advice from the comments below. 

Rules and Guidelines are an excellent idea. I have something like
that for my clients. They sign it before I will work with them. 
It includes the cost of late fees/penalties and bounced checks. 
That way, if I have to go to court to collect the income, the
judge will also grant me the late fees.

Make sure that your intake application includes information
on both parents' jobs or businesses. Always make copies of 
the checks they use to pay you. I'll explain why later.

You'll find a lot of good forms and tools for your daycare business
among the books and workbooks published by Brigette Thompson.

Here's another idea for the future. Arrange to accept payment by
credit card. Most of your children's parents may be living on
tight cash-flow budgets. But, I'll bet all of them have credit 
cards. If they can pay you that way... you're more likely to 
have fewer unpaid bills. 

Do a Google search for 'merchant accounts' or set up a free
PayPalaccount. PayPal is a good option because there are no
monthly fees - and you can e-mail invoices to parents for 
them to pay using their credits. And you never have to do 
any processing.

However, if you do set up the merchant account with your bank or
an online provider, you could have each of your parents sign an
agreement that if they are late more than x number of days (2-3?),
you have the right to charge their credit card. Get an imprint of
the credit card and have them sign it - just like they do when they
check into a hotel. It's signed, but not charged until they check out. 

This, you can't do with PayPal.

That doesn't solve today's problem, though, does it?

For today, file a case in small claims court. See if your local 
court has evening hours, so you don't have to lose income to
chase after this money. They often do have hours at least one
night a week. 

Once you win, and you will, take your judgment to court's 
marshall or sherrif's office. This is where you'll be using the
information from the intake sheet and those check copies you've
been so diligently making. You have information about their 
jobs and/or bank accounts. Arrange for the law enforcement office
to garnish their wages and/or attach their bank accounts. OR, worst
case, pay them to sit in the person's place of business and collect
all money that comes in until your bill is paid. 

There is a fee for this. But don't worry, they add it to the
total judgment. All of these steps will cause your former customer
to be most embarrassed and humiliated. But you will be paid within
about 60 days after you get the judgment, with interest from the
date of the court ruling. 

Incidentally, odds are, they won't even bother showing up in 
court, unless they have a real dispute about the way you took
care of their child. Since they won't show up, you'll win the
case automatically. 

There's a good chance that you'll be able to find the small 
claims forms online, if you look up your city or state court's
web site. And the filing fees tend to be quite small. Only, you
have to make sure the parents are served with the lawsuit. So, 
the easiest way is to pay the court to send out a registered

Please let me know if you need any clarification.

Best wishes

Your TaxMama-ga

Clarification of Answer by taxmama-ga on 14 Mar 2005 06:40 PST
I am not familiar with .
But you might ask Brigette (see her site for contact information)
to see if she thinks they're a reputable outfit.

On the other hand, if you get a judgment, it will appear on 
their credit report. No one wants that...

Best wishes

Your Taxmama-ga

P.S. PayPal let's you set up an automatic monthly billing, 
like a subscription account.
Subject: Re: As a home daycare provider how should I handle parent payment problems?
From: needsomeinfo-ga on 09 Mar 2005 18:08 PST
Call around to collections agencies in your areas.  Basically they
will call and send letters to the people in an effort to make them
pay.  Many will take smaller clients and will attempt to collect your
fees in exchange for a percentage of the amount collected.  The
percentage varies according to the amount you are trying to collect,
how long the bill has been outstanding, and the volume of collections
accounts you turn over.  They will also report to all three credit
bureaus as part of their service.  Good luck!!
Subject: Re: As a home daycare provider how should I handle parent payment problems?
From: daniel2d-ga on 09 Mar 2005 23:57 PST
First,  require payment at the beginng at the week.  No payment - no
childcare.  No collecting past due amounts.

This is a business.  Don't let anyone take advantage of you.  Give a
discount for prepayment of two weeks or more to encourage prepayments.
Subject: Re: As a home daycare provider how should I handle parent payment problems?
From: cynthia-ga on 10 Mar 2005 09:33 PST
Type up a "Memo" outlining all your "Rules and Guidelines" Read this
one for ideas, don't miss the section on Payments.

Our Rules and Guidelines (excellent Newsletter)

Subject: Re: As a home daycare provider how should I handle parent payment problems?
From: littlebird75-ga on 10 Mar 2005 11:50 PST
Thanks for all the feedback so far. As I was searching online for more
information I found this website, Are you guys
familiar with this service? It looks like they let providers report
unpaid account for free to be added to a nationwide service all about
parents with outstanding daycare bills. Please let me know if you have
used this before.

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