Income

The primary source of income for many centers is the fees that parents pay for child care. The fee amounts will be determined in great part by the funding your center receives. Many centers do not reach full enrollment until the end of the first year of operation, so it is important to take into account lost revenue during this period. Also, it is important to plan for lost revenue during the time after one child leaves the center and another child is enrolled.

Most centers plan on an 85 to 90 percent utilization rate and calculate fees accordingly. After you've estimated monthly costs to run the center, you can calculate what you'll need to charge for each child to cover costs. The teacher to-child ratio is generally much higher for infants and toddlers than older children, so infant and toddler fees are usually significantly more expensive than preschool and pre-K fees.

Your center's fees should reflect realistic expenses, and should be in alignment with the fees charged by other centers of similar size and quality in your community. Many centers collect fees on a monthly basis, and may charge late fees for tuition paid past the deadline. Some centers bill parents in installments over the course of the year. Your center should publish and follow a consistent policy on fees and payments.

Set a schedule for payment (weekly, monthly, or annual tuition installments). Child care fees vary; some centers operate with a sliding fee scale based on family size and income, while others depend on parents to pay a set fee, regardless of income. Many centers give a sibling discount for families enrolling two or more children .

Track fee collection accurately, including rate payments of other supplementary fees, and give parents a regular accounting of fees due and fees paid. Your bookkeeper or accountant should reconcile the center's income on a regular basis to make income reporting and tax payments (if applicable) in a timely manner.