Debt is something of a taboo word for some nursery managers. NDNA can understand why - it is of course never easy to approach parents about monies owed, especially when it is clear they are experiencing financial difficulties.
While no nursery wants to ask a family to leave, debt must not be allowed to threaten survival. A few parents owing even relatively small amounts of money can have a huge impact on cashflow, especially for smaller nurseries.
In the current economic climate, this looks set to deepen. Part of the problem is that when you offer families a warm, welcoming environment, they feel that you will be naturally sympathetic if they experience difficulties. But allowing even a few weeks' fees to build can soon become a debt they cannot realistically pay.
So, what can you do? NDNA believes a firm but fair approach is vital. If a parent misses a payment, ask for a private word with them to check if there is an issue. There are always options, such as weekly payment plans or even changing payment dates or methods. It is also a good idea to remind parents to check their entitlements - can they get childcare vouchers from their employer, and can they get any help through tax credits? Every little bit really does help.
It is important that you have a clear policy in place about when you expect to be paid, and the action you will take if a parent fails to meet it. You can balance this by using the policy to explain your approach and the help available if a parent is unfortunate enough to have problems.
Most of all, you must not be afraid to stress that childcare is as essential as any other bill. A parent cannot work without high-quality childcare, and you can not pay your staff without fees.
NDNA has recently seen an increased level of calls to its free member helpline about tackling debt through the legal system. While there will always be some cases that require legal action, we firmly believe that a pro-active approach to debt can avoid these often distressing and frustrating situations. Above all, making sure you tackle debt head-on helps to ensure that children and families can benefit from your care at a time when they need it the most.
Purnima Tanuku is chief executive of the National Day Nurseries Association
- See Analysis, page 10
Your firm but fair approach should be communicated to staff, who in turn reflect it and understand the impact of bad debt on not only them and their salaries, but also the long-term sustainability of the setting.
