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Thread: Deposit

  1. #1
    jec
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    Deposit

    This topic was just recent on a thread ~ terminating and the benefits of having the 2 weeks deposit for last weeks of care.
    I have always used the deposit ( I ask for one week ) to be given upon signing to hold the spot if not starting right away and then it's used towards the first week of care. Seems that many on the board use the deposit for the last weeks of care.

    I have been like most of us, struggling to get my daycare up and running as I have recently moved to a new city ( thankfully I'm now full come end of the year )

    So here is the reason for my post- does everyone who keeps the deposit for end of care in a file and or bank account for when someone leaves? I've always been in a position to use it when I get it.

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  3. #2
    Euphoric ! kidlove's Avatar
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    Not only am I glad i found this site because it is so nice to have others to share my issues with but also because I have learned alot, or alot has opened my eyes. although i live in another country and our practices can sometimes differ. (we do not really do deposits) we just expect parents to always be pd ahead one week or two. (if parent doesnt pay we can terminate care until pd in full) BUT, I plan to change my contracts to state they are required to pay ahead every week or two weeks (as they do) but also require a last two week pay. of which, I will put into a sep. acct. I have always had trouble if I have had someone cancel care at last minute or have to terminate and lose that income. SO....first of all, THANKS to all you canadian bussiness women for your smarts!! and second of all, although I havent done it yet...I would say, save the money in separate account for the what if's.

  4. #3
    Euphoric !
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    Casht the cheque and/or deposit it right away to prove that it doesn't bounce. The money is yours to spend but be cautioned that when they do leave care you will need to have enough money in reserve to cover the deposit.

    I used to have it applied to the fist weeks of care too. Then for awhile I did first and last week. Now I am moving to last two weeks since it has become pretty much standard in my area to expect a deposist of two weeks fees. In essence what this means is that you are always being paid in advance since in your mind the deposit can go towards the start of care but then the parents are paying for the next week in advance so it is the same thing just to your advantage to make the money for the last weeks of care.

  5. #4
    Expansive... BlueRose's Avatar
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    I don't open my daycare until October, but I have already opened a bank account just for deposits. I am also working on a speed sheet to keep track of them. I was wondering when do we claim the income, when we put the money in the back or when we use it at end of care?

  6. #5
    Euphoric ! Inspired by Reggio's Avatar
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    I am one who charges two weeks deposit that is used at the 'end' of care if proper notice is given on their part.

    I keep track of in my Excel account on their client ledger ~ when they paid it, how much they paid, cheque number and so forth and a spot for 'applied on'.

    As hard as it is you have to start to pay yourself first if you want to be able to get a 'savings' going so do not think of this $$$ as accessible $$$ but a BILL you must pay the minute you get paid it X amount goes into savings FIRST before you pay any other bills ~ you pay your other bills with what is left .... so even if you do not put ALL of it based on your family budget SOME must go in the beginning! Next you pay your mandatory bills ~ mortgage/rent, heat, hydro and cause you 'need' those for both personal and business and than you pay your 'credit' you may have and rather than minimum payment you pay off 20% higher than your minimum on any 'consumer debt' ... and THAN you buy groceries, what you can afford for your cable / phone / entertainment, clothes, gifts and other 'fluctuating' expenses with what is LEFT ... but this is not how most people make a family budget and is why most families live in DEBT .... Xmas comes along and rather than spend within our budget we overspend and buy stuff on credit and so forth, we see a 'sale' on clothes and even though they are not in the budget we put them on credit and so forth, we are tired and stressed and want a get away so we slap a 7 day vacation to Cuba on our credit card .... and before you know it you are spending $1000 a month or more than your household income budgets for .... there are whole TV shows devoted to people who think this is 'normal' way to live

    I personally do not SPEND this money I put all my security deposits into a separate savings account when I get them ~ so that when they leave IF I need the $$ it is there .... so this also ensures that should I have a client that I just want GONE and I do not want to give them notice but do not have 'grounds' to terminate without it than I have the financial ability to refund their deposit without affecting my family budget cause the $$ is still there from them.

    Thankfully in 5 years and 17 children 'turning over' in the program I have RARELY touched these deposits because I have been fortunate to always gets more than the minimum notice of two weeks which has allowed me to adjust my budget for the pending reduction in income until the space is filled again ~ this has allowed me to create a nice nest egg for myself while still paying down any consumer debt I created to get my business up and going ~ and this year I finally became 'debt free' with both the business and our personal family budget (mortgage aside).

    I have even been able to use some of the money for a 'large' purchases for the daycare like when I bought the carseats cause that cost over $1000 all at once to get the 5 seats for the van ~ however using that did not touch the 'deposits' of the 5 clients I currently had in my program at the time ~ it came from saving and not withdrawing the deposits of previous clients who'd left and just making do with 'less' during those two weeks.

    So basically the SD become part of my 'rainy day fund' it is the same savings fund that I put in my vacation pay / sick day savings for clients who are on my higher fee plan and do not pay me, it is also where I put aside $ for taxes and so forth and is my 'retirement' savings as well ... so I try very hard not to 'dip' into it unless absolute necessary cause this is my 'pension' so to speak since we are self employed no one else is preparing for my retirement but ME ~ if there is a way we can cut 'extra' expenses to avoid dipping into I will.

    I do not mean to sound flippant about savings ~ I admit and am grateful that I am finally in a good place in my life financially that I do not have to 'worry' so much ~ however the fact remains that for decades I lived on a household income of less than $25,000 and I still had a GOOD LIFE with roof over my head, food in my belly, clothes on my back, cheap vehicle and so forth I had what I NEEDED to enjoy life including a SAVINGS account reflective of that income ~ 3x the households monthly income for emergencies and many a time I NEEDED that to keep abreast when emergency struck and had to 'rebuild it' .... so now we have a larger household income to use and so we have 'more expensive tastes' now cause we can budget for those and now I can put MORE money aside for 'rainy days' because while it might 'feel' like I NEED the money now for XYZ ~ it is not really a NEED but a WANT that is driving me and I need to keep that in check knowing the difference and not getting into the habit of DEBT as a crutch for percieved 'needs' to be met ... otherwise I will end up like my family members whose household income was over $500,000 a year for decades .... they should be millionaires by now ... and yet somehow they still ended up DROWNING in DEBT and now have nothing because they could not tell the difference between a 'need' and a 'want' and they were living beyond their means and not preparing for a future as a result.
    Children construct their own intelligence. The adult must provide activities and context, but most of all must be able to listen. Children need proof that adults believe in them. Their three great desires are to be listened to, to understand, and to demonstrate that they are exactly what we expect."
    Loris Malaguzzi

  7. #6
    jec
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    Thanks for the advice ladies

    I laughed when I saw the size of your post Reggio but I see where your coming from. We don't live in credit debt and don't live beyond our means as we were once there and thankfully got out before we got in way over our heads. We are in a good place now as I have young children to put first but starting up my business I guess I could have put the money in savings and done without a few things for sure.
    I think after reading so many having problems with families leaving and not paying..moving foward I think I will change it to last weeks of daycare. Would you share your spreadsheet? Sounds like something I could use and or direct me where you got it (paid for it?)

  8. #7
    Euphoric !
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    I only charge $100 as my deposit and it is applied against the last week of care as long as all requirements are met. I make out the receipt when it is received so basically on the the last week of care they just owe $100 less for their fees so I keep it simple that way. But my clients are always just returning from maternity leaves and I know their finances are not in great shape.

  9. #8
    Euphoric ! Inspired by Reggio's Avatar
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    Quote Originally Posted by jec View Post
    .... Would you share your spreadsheet? Sounds like something I could use and or direct me where you got it (paid for it?)
    Just an Excel file I created on the computer ~ nothing fancy opened an Excel file saved as Income 2012 and than inside there each client has a worksheet page within the file just the client info on the top of the page including start date, security payment paid, cheque number of SD and a spot for 'applied on' so I know when I apply it to care as well as if they are on option A fee plan or B fee plan and who they want their 'receipts' made to at the end of the year so I do not have to 'look it up' in their paper file late. Than the rest of the page in 'columns' with the headings of Billing Date, Care beginning and ending on, Amount Billed, Amount Received, Cash / Cheque #, Special Notes .... I than used the 'equations' option to make the amount billed and amount received columns tally for me so that it does the math form me and than both columns also auto sum for me at the bottom to give the the total billed and total paid so that at tax time I can just looks at it and right a receipt for the 'total paid' without having to do more math ~ I HATE math

    When the next 'business year' starts I open that file and click it 'save as' and change it to create a new file of Income 2013 and than just delete clients worksheets who are not gone and the ones who 'remained' I just remove the previous billing and receiving but than I do not have to 'retype' all the top page information again ~ it carries over for me.
    Children construct their own intelligence. The adult must provide activities and context, but most of all must be able to listen. Children need proof that adults believe in them. Their three great desires are to be listened to, to understand, and to demonstrate that they are exactly what we expect."
    Loris Malaguzzi

  10. #9
    jec
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    I just saw your post now Reggio ~ opps! Thanks for the advice

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