Nursery World - Pay time

Carefully drafted terms and conditions inspire parents' trust and help nursery owners avoid bad debt, says legal expert John Deakin Fee income is the lifeblood of a nursery. Planning and resourcing will be based upon projected revenues from the number of places filled. It follows that non-payment of fees can hit cash flow hard and affect the stability of the business. Proper control of current and bad debts is, therefore, vital to the success of any nursery. If done early and sympathetically, it is also good for relationships with parents.

Fee income is the lifeblood of a nursery. Planning and resourcing will be based upon projected revenues from the number of places filled. It follows that non-payment of fees can hit cash flow hard and affect the stability of the business. Proper control of current and bad debts is, therefore, vital to the success of any nursery. If done early and sympathetically, it is also good for relationships with parents.

The finance director of a group of nurseries once commented, 'It is sometimes easier not to pursue unpaid fees than to fall out with parents, because news gets around.' But the other side of this is a much less helpful message: that the nursery is a 'soft touch' for defaulters. Key elements for dispelling this message and controlling debt are:

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