The Netherlands has nearly 5,000 organizations offering day care and/or after-school care. Invoices sent by these organizations are only paid on time in half of the cases. At Payt, we know the causes of this. Better yet, we also know how to improve the payment behavior of, in this case, the parents.
The Same Problems as Other Sectors; Causes Differ
“In terms of payment behavior issues, the childcare sector does not differ much from other sectors, but the causes do,” says Sander Kamstra, director of Payt. “In general, childcare companies have to wait a long time for invoice payments, on average about 22 days. Moreover, more than one-third of all invoices are only paid after 1 or 2 reminders, and a portion of them remain unpaid after 3 months. Therefore, a lot of money has to be advanced, which can negatively affect the liquidity of childcare organizations. Fortunately, this is well taken into account in the sector.”
Payment Behavior in the Childcare Sector
- On average, invoices are paid after 22 days
- 38% of all invoices are only paid after 1 or 2 reminders
- 2.13% of all invoices remain unpaid after 3 months
Causes
According to Kamstra, there are various reasons for the delay in payments: “As a childcare company, you encounter various situations. Think of parents who only pay the invoice after receiving the childcare allowance. Or bank accounts that do not have (or do not have in time) sufficient balance for automatic debit. And reminders that are delivered to the wrong address because the parents are separated.”
Want to Get Paid Faster? This Helps
In no particular order:
- Offer parents the option to pay with iDEAL. “Our figures have shown that this payment option really ensures faster payments,” says Kamstra.
- Acquire childcare software that allows you to send automatic but personalized payment reminders via email or SMS.
- A tip in line with this: send all parents who have opted for automatic debit a reminder via SMS well before the debit date so they can ensure sufficient balance in the account.
- Automate reversal processes and payment arrangements for more consistent – and thus more effective – debtor management. This can be done very easily with Payt’s software.
- For all childcare organizations that work with a parent portal and/or planning tool: link the debtor management software to the portal and/or tool, so parents can view invoices and the invoices are automatically adjusted if additional care days are taken. “This provides more convenience and fewer ambiguities for both parties,” says Kamstra.
Customer Case: “Payt Makes Debtor Management Child’s Play”
Dennis Vermeulen of Njoy, a provider of day care and after-school care for children aged 0 to 13, had two options after the departure of the financial administration employee: hire someone or choose automation software. He chose the latter and enjoys it daily, as do his colleagues and the parents who entrust their children to Njoy.
