Charging Hourly vs. Flat Rate?

[MyKzooFamily]

I am deeply considering charging hourly, billed on Friday at pick-up, and to be paid Monday before drop-off. I have done flat-rate before, and haven't had problems with it, but I was only watching 1-2 children max, and the parents never abused the times.

After working full time, and sending my own children to daycare, I saw how many parents abused it. If I'm going to bill for 'over hours' and 'too early hours', I might as well just bill hourly. I can do an hourly rate, and bill based on the sign-in and sign-out hours. I can hand them a tuition bill Friday at pick-up, and they can bring me cash or check Monday morning during drop-off, or pay online over the weekend.

I like that flat-rates are easy, though. However, if I'm supposed to do 9am to 5pm, I don't want to have to mess with 'billing' for 8:25 to 5:45. I feel like if I do hourly, parents will be encouraged and motivated to get here on time, and not drop them off too early. Plus, if they pick them up early one day, I can give them a discount.


Anyone else bill hourly? Or does everyone just do the flat-rate with contracted hours, and bill extra for overages?

[daycarediva]

I bill flat rate with contracted hours.

My concern with hourly is, would you have a minimum, then each additional hour? It would make me nervous that when dcp of 2 kids in my care gets broke (gets paid monthly) I would be broke too.

[MyKzooFamily]

It would make me nervous that when dcp of 2 kids in my care gets broke (gets paid monthly) I would be broke too.

Sorry, I'm tired, but I don't know what you mean by that. Do you mean.. That you think a parent could go from 40 hours to 4 if they were between jobs or couldn't afford it or something?

I would require full time or part time minimum hours (15+ and 30+) per week. And if they fell below those hours, they would have to request new admission based on those hours. I may not accept a full timer that wants to go part time, if I have another child that wants in on a full time spot.

I'm more flexible with hours and payment than most (as I give parents allowable sick days and vacation days unpaid, but there is a cap).

I suppose weekly would be much easier.. I just thought hourly would give me an easier way to bill for hours if they went over, and it would 'remind' them payment is due, since most parents forget when you don't hand them something reminding them!

[Country Kids]

I just switched from hourly to flat rate this year. I love it and making money!!!!

I don't care if you pick up early your still paying flat rate, I don't care if you won't be here till later your still paying flate rate.

I don't care if your child is here open to close -still flat rate.

Wished I had done this 20 years ago-

[daycarediva]

Ahhh ok, I see.

Yes that's what I meant. I have a dcp that gets paid monthly through her employer. She gets paid on the 15th of one month and come the first week of the next month she is whining about paying me. She still does, and ALWAYS on time, but the 'broke' comments KILL me. I KNOW she would take them out as much as possible the week before she gets paid(but normally leaves them here open to close despite the additional fees for the first two weeks) Everytime she says she is broke I 'suggest' she pay monthly next time, she agrees and never does. Rinse and repeat.

I think for me I am too lazy to be adding hours every day for all 8 kids. I have a flat rate and then only have to add fees when there is an issue.

[MyKzooFamily]

I just switched from hourly to flat rate this year. I love it and making money!!!!

I don't care if you pick up early your still paying flat rate, I don't care if you won't be here till later your still paying flate rate.

I don't care if your child is here open to close -still flat rate.

Wished I had done this 20 years ago-

Is the flat rate the same for everyone? Or do you base it off of their hours of when they think they will need you? The going rate is $100/week for child care, but I'd like to get $125-$135 full time (up to 45 hours), and $70 part time (under 28).

[MyKzooFamily]

Ahhh ok, I see.

Yes that's what I meant. I have a dcp that gets paid monthly through her employer. She gets paid on the 15th of one month and come the first week of the next month she is whining about paying me. She still does, and ALWAYS on time, but the 'broke' comments KILL me. I KNOW she would take them out as much as possible the week before she gets paid(but normally leaves them here open to close despite the additional fees for the first two weeks) Everytime she says she is broke I 'suggest' she pay monthly next time, she agrees and never does. Rinse and repeat.

I think for me I am too lazy to be adding hours every day for all 8 kids. I have a flat rate and then only have to add fees when there is an issue.

Yeah, maybe that would be best. I may end up spending too much time logging hours and figuring out how much it is, and there may be conflicts on the hours. So maybe I'll just do flat-rate, and figure out what I should charge...

[daycarediva]

I charge a set amount, (all pay ft rates, regardless of attendance and am fortunate to be able to do so now).

Prior to this I came up with an hourly pay scale, say 5-20 was X amount and could only be used in a two day time period. 20-30 was x amount and had to be used in a three day time period and 30-50 was x amount and could be used in a 3-5 day time period.

Like I said, Im lazy and didn't want to argue with parents.

[HappyHearts]

I just switched from hourly to flat rate this year. I love it and making money!!!!

I don't care if you pick up early your still paying flat rate, I don't care if you won't be here till later your still paying flate rate.

I don't care if your child is here open to close -still flat rate.

Wished I had done this 20 years ago-

This is how I've done it for 20 years! I love it. I never even remind my parents to pay. Every Friday, they all come in with cash automatically. Nice!

[Willow]

I offer contracted hours between set times (7:15a-5:15p). I absolutely do not do early drop offs or late pick ups beyond those set hours but don't mind being flexible within them on rare occasions.

I do not charge for flexibility within those set hours.

I charge down to the quarter hour. So if someone drops off at 8:04am and picks up at 4:11pm I'd bill that as 8:00-4:15 (8.25 hours). If you don't want to mess with that level of break down you can bill to the half hour (8:00am-4:30pm) or even whole (8:00am-5:00pm) and if parents drop off a bit later or earlier than that give them a pat on the back and praise them for wanting to spend time with their kid. Maybe shoot them a break every once in awhile in appreciation if they make it a habit. I like to do that on the holidays, my parents have been so appreciative when I have done that in the past.

I send out invoices via email by Saturday at 7pm and payment is due the morning the kiddo is dropped off the following week. I'm sorry but I have zero interest trying to do math on a Friday afternoon when my brain is fried

I have no one who stays open to close, which I believe is best when kids are this young. That said, I only take full time hard working families who need me a minimum of 32+ hours/week so those weeks where I only make the minimum 20 are very very rare. The structure those hours afford the kids make them infinitely easier to handle and in general they seem happier.

I do charge a weekly minimum or 20 hours so if anyone happens to go on vacation I'm still able to maintain a decent income.



For me it's a bit of a pain to crunch the numbers sometimes, but I've found the system to be the best fit for me and my parents really appreciate it over doing a flat rate. I think in the end the kids get the most out of it as parents are pretty "inspired" to get over here fast to pick them up and stop the clock from running .

It's been well worth the minor Saturday afternoon headache it causes for them to reap that benefit

[MarinaVanessa]

I charge a weekly flat rate but there are conditions. One week costs $160 per week and is for 10 hours maximum a day (50 hours a week) on a contracted schedule. Meaning they need to tell me and decide on which 10 hours a day they are going to use.

Late arrivals don't allow for late pick-ups so if they are late in dropping off in the morning then they still have to pick up at their normal pick-up time. If they are absent for whatever reason then they lose that day and there are no deductions or discounts and there are no make up days (for part-timers).

If they need to drop off off earlier or pick up later than their contracted schedule and they arrange it with me in advance then they pay extra (whatever their hourly rate breaks down to). If they drop off early or pick up late without telling me then they pay $5 fo revery 15 minutes (or portion) that thet are late. I don't give grace periods.

The reason that I don't do hourly rates for all clients (but I do accept drop-ins) is because then they only want to pay for the times that they do use and sometimes they start changes their times all crazy. Before you know it your full time client takes 2 days off from work and then only pays you for 3 days instead of the 4. Then they start not wanting to pay for holidays etc. Sorry, but that doesn't work for me. Give me your schedule and we will figure out a contracted time and that's the fee even if you choose not use all of that time. Clients are paying me for a guaranteed spot for their child, if they decide to come in 2 hours late thats ok ... I was already paid for those 2 hours.

[Willow]

The reason that I don't do hourly rates for all clients (but I do accept drop-ins) is because then they only want to pay for the times that they do use and sometimes they start changes their times all crazy. Before you know it your full time client takes 2 days off from work and then only pays you for 3 days instead of the 4. Then they start not wanting to pay for holidays etc.

Wow!

I'm not sure what kind of families you've had to deal with in the past but I can about imagine if that's been your experience!!! How incredibly disrespectful!!!


My families would never tell me they were switching times or days. Or tell me they were only going to pay me for certain days or for "x" amount. They may *ask* me anything they wish, but they know I have final say and if they don't like it they are more than free to seek care elsewhere.

I've moved, and I've had to terminate a family only once....that's been my only voluntary turnover beyond aging out.....never had a family leave or even attempt to alter the terms of our arrangements. After reading your above I feel very blessed in that regard!



And actually, on the flip side, many of my families who have come from other daycares moved primarily because they couldn't stand flat rates. Many on my waiting list are hoping I'll terminate current families so they can get in on hourly. Once they're in, they'll avoid doing anything that might jeopardize them losing their spots ::

[MarinaVanessa]

I havn't had bad experiences in this regard because I have always charged flat weekly fees for my FT and PT families. The only clients I charge an hourly rate to are my drop-in clients that I fill my gaps in with and even they start as drop-in clients until I do get an opening for FT or PT.

I am however on our childcare association board and one of the things we do is offer support to other family childcare provider with issues. This issue comes up alot. In many cases a child care provider will start by charging hourly and will keep a log of the hours that the child was in daycare and then at the end of the week they would invoice the families. So one week the child would be in care 4 days and 40 hours then one week the child would be in care for 2 days and 8 hours etc. It was all over the place.

Or maybe I'm misunderstanding ... I charge a flat weekly rate based on the maximum hours that the families need. Many of my families are charged a different rate because they have different scheduled hours but their weekly rate is always the same. Is that what you mean by hourly? Because to me that's still considered a flat weekly rate. I guess to me it just doesn't make sense to charge based only on the hours that the family needs and not set it in stone. It leaves a lot of room to have the family take a day of or two and not have to pay for those days.

[daycare]

I havn't had bad experiences in this regard because I have always charged flat weekly fees for my FT and PT families. The only clients I charge an hourly rate to are my drop-in clients that I fill my gaps in with and even they start as drop-in clients until I do get an opening for FT or PT.

I am however on our childcare association board and one of the things we do is offer support to other family childcare provider with issues. This issue comes up alot. In many cases a child care provider will start by charging hourly and will keep a log of the hours that the child was in daycare and then at the end of the week they would invoice the families. So one week the child would be in care 4 days and 40 hours then one week the child would be in care for 2 days and 8 hours etc. It was all over the place.

Or maybe I'm misunderstanding ... I charge a flat weekly rate based on the maximum hours that the families need. Many of my families are charged a different rate because they have different scheduled hours but their weekly rate is always the same. Is that what you mean by hourly? Because to me that's still considered a flat weekly rate. I guess to me it just doesn't make sense to charge based only on the hours that the family needs and not set it in stone. It leaves a lot of room to have the family take a day of or two and not have to pay for those days.

I also charge just like MV... I charge a daily rate that is multiplied by the number of days that you attend care. This then becomes your weekly rate. You are allotted 9.5 hours of care each day. Anything over 9.5 hours of care is charged at the rate of $6.00 per hour or fraction thereof.

If you only charge when they are there, you can never forecast the amount of money to budget for. Kind of funny how when given hourly option, all of a sudden grandma can watch them or someone else....

[SunnyDay]

Whatever you do, the best thing I have learned from this board is to get paid in advance.

Our families pay on Fri. for next week.

If you need to overcharge them and then give them a credit for unused hours, do that.

Personally I would not want to deal with calculating hours or not having a steady income, but I can see how it is fair and parents would like it. It just sounds like a big hassle to me. I prefer a flat rate