Tuition, registration fees and deposits
Set up income accounts for tuition, registration fees, late pickup fees and activity fees. Tuition paid in advance for the following month is a liability until the month arrives. Security or enrollment deposits are liabilities until you apply or return them. Use recurring invoices to keep billing steady and to see who is behind at a glance.
Subsidies and agency payments
Some families pay part of tuition through a government or employer program. Record the parent portion and the agency portion separately, tied to each child's account. Agencies may pay late or in batches, and they may adjust payments after attendance review. A receivable report by payer helps you follow up with the right party.
Food program reimbursements
Where a provider takes part in a food program, reimbursements are income, and food purchases are expenses or program costs. Keep the menus, receipts and attendance records that the program requires, because audits ask for them. Keep food program funds clearly identified so they do not get mixed with tuition.
Staffing, ratios and payroll
Payroll is by far the largest cost. Track hours against enrollment so you can see whether you are staffing above need. Substitutes and part-time workers are generally employees. Required background checks, training and certifications are costs to track by staff member. Compare payroll as a share of revenue every month and discuss why it moved.
Licensing, insurance and year-end
Licensing fees, liability insurance, playground equipment, toys, curriculum, cleaning supplies and vehicle costs have their own accounts. Parents often ask for a year-end statement of what they paid, for dependent care benefits or tax purposes, so keep records by family, and be ready to provide your taxpayer identification number as the provider. Confirm the exact rules with a tax professional.
If you run the center from your home, the home use rules are specific for child care and differ from the usual home office. Ask a CPA who knows the area before you claim anything.
Cash flow around payroll
Payroll hits every two weeks, while some payments from agencies and parents trail behind. Keep a simple forecast covering the next eight weeks, showing expected tuition, subsidy payments and payroll dates. When a gap appears, you can adjust billing dates, speed up collections or arrange a line of credit before you need it. Late fees should be clearly stated and consistently applied, since uneven enforcement causes more conflict than the fee itself.
Keep a simple log of enrollments, withdrawals and open spots, because empty slots are lost revenue that cannot be recovered. Compare filled capacity with staffing each month. If one room is consistently underfilled, adjust hours or the staffing plan before payroll absorbs the loss.
Keep family files organized, including signed agreements, deposit receipts and authorization for automatic payments, and store them securely.
Common questions
How do I handle a family that leaves with an unpaid balance?
Send written notices following your parent agreement, then decide on a write-off. Keep documentation either way.
Should I bill weekly or monthly?
Follow your enrollment agreement. Weekly billing improves cash flow, while monthly billing is less work.
This guide is general information, not tax, legal or accounting advice. Rules, fees and due dates change; check with the IRS, the NJ Division of Taxation or a licensed professional for your situation.