Nursery Provision and Bad Debtors
Head of debt recovery Rob Winder talks about bad debt within nurseries and provides his top tips for good credit control.
For many education providers, the introduction of pre-school and after-school care has been the organisation’s first experience of handling bad debt.
Like all businesses, nurseries and other child care providers suffer as a result of slow payers and unpaid bills, but the close relationships those organisations build with families means operators often find it difficult to get tough with parents and pursue bad debt.
As well as advising many nurseries and after school clubs, Head of Debt Recovery Rob Winder has provided training to National Day Nurseries Association groups on how to avoid bad debt and how to manage it efficiently, should it arise. His five top tips for good credit control are:
Always ensure that you have a signed contract setting out the fee structure before admitting a child.
If the child lives with both parents, ask that the both parents sign the contract. In the event of a default on payment, both parents can then be pursued for the money rather than just one. If the main earner in the family has not signed the contract, you could find your options for collecting the money owed to you are limited by the financial resources of one parent.
Have a written credit control policy and stick to it. Ensure that reminders etc. are sent out according to that policy and that if you threaten to take action that you do so.
Ensure that you pursue bad debtors - if you gain a reputation of being a “soft touch”, you may find yourself attracting parents who have run debts up elsewhere.
Pursue debt quickly. The longer a debt is left the harder it is to collect.
Burnetts offers an affordable, fixed fee debt recovery service . For further information on credit control policies and practice or on debt recovery, or for an initial no-obligation discussion, contact Rob Winder.
About the author
Rob leads the Debt and Property Recovery team and is head of the Penrith office.