Daycare Invoicing Best Practices

The seven policies that help prevent disputes

1. Bill in advance, not in arrears. Tuition for week of Mar 10 is due Mar 10, not Mar 17. Arrears billing teaches families that care is on credit; advance billing teaches that the spot is paid-for.
2. Two-week deposit at enrollment. Held to the end of care, applied to the final two weeks if the family gives 30 days' notice. Forfeited otherwise. This single policy cuts no-shows on start dates and short-notice withdrawals dramatically.
3. 30-day written withdrawal notice. Tuition is owed through the notice period whether the child attends or not. Without this, families leave when they get a free Pre-K spot and you eat two weeks of tuition.
4. No tuition reduction for absences, vacations, or illness. Your costs don't drop when a child is out. State this in writing in the contract. Offering "make-up days" is fine; reducing the invoice is not.
5. Closed-day policy in the contract. List the 8–12 days/year the center is closed (federal holidays, staff training, winter break). No tuition credit; build the rate to assume those days off.
6. Sibling discount, not multi-child discount. For example, 10% off the second child. Think carefully before going beyond — the second child still uses staff time, food, and space.
7. Annual rate increase, announced 60+ days ahead. Set the amount in line with your local market. A short letter from the director with the reasons (wages, food, insurance) helps families understand the change.

The invoicing tech stack that pays for itself

• Auto-generated invoices. Recurring weekly/biweekly invoices from the enrollment record. Manual invoicing for 40 children takes hours every week.
• Payment methods on file. Cards typically cost about 2.9% + $0.30 per payment. ACH bank payments cost about 0.8% or $1–$5 per payment, depending on your processor. Caredence currently accepts card payments only.
• Automated payment reminders. Sent 3 days before due, on due day, and 3 days after. Sending reminders on a schedule means staff don't have to chase each payment.
• Year-end tax statements. Make them available to families by January 31. These are not Form W-10 — Form W-10 is what a parent gives you to request your tax ID. The year-end statement is your own document reporting what the family actually paid, used for the child and dependent care credit.

When to write off vs collect

Collection success tends to drop sharply the longer a balance goes unpaid. Termination clauses in the contract (typically 14 days past due) exist because the math usually favors freeing the spot over chasing the receivable. Write off small balances under $100, as an example threshold; pursue larger amounts through small-claims court only when you have documented late notices, the signed contract, and a current address.

How Caredence handles this

Caredence generates invoices automatically from each child's enrollment, emails both parents, and accepts online card payments. Parents can also turn on autopay, and centers can send automatic payment reminders. Parents can also download year-end tax statements from the parent portal.