Nursery World - Work Matters: Finance (19)

Lynn Bryden is business and finance support officer at Sure Start Strategic Partnership Tyne & Wear (www.northtyneside.gov.uk).

Economic forecasts for 2008 look gloomy and it's important for nurseries to avoid bad debts.

Preventative measures

The easiest way to ensure that you are paid on time is to request fees in advance. If you have taken the business decision not to do this, there are several steps you can take to minimise risk:

- Credit-check potential customers. For a small cost a status report can be obtained from a credit reference agency.

- Ask for a deposit. The amount can be determined by you, i.e. a percentage of the month's fees, and can be offset against the parent's final payment.

- Include payment terms in the contract. Clearly written terms are essential and should state the action you will take to recover money owed and at what stage a child's place will be terminated.

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