Question for Others Who Do Childcare in Their Home

Updated on December 28, 2010
J.S. asks from Cortland, IL
5 answers

I have a question about my home daycare. I just received my IL daycare license, and starting Jan. 1st I really want to go about everything the right way. I'm looking into opening up a business account with my bank, so I can make sure my income is separate from my husband's--for tax purposes ONLY!!
For all you other mom's who provide childcare...How do you track your income & expenses?? Do you use quickbooks, a ledger, etc?? What do you use, and why?? I'd love to get any input I can so I can make a decision soon.
Also, do any of you have a website to promote your service?? I just ordered some business cards, and even thought about creating flyers to put out in the neighborhood. So my next question is, what do you do to promote your business??
Thanks so much in advance!!

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F.W.

answers from Cumberland on

I use Microsoft Excel and made up my own set up to track all income, expenses and deductible meals. That way I could include everything I needed to include. You might want to try Red Leaf Press--they have lots of good financial info and resources. I also keep a receipt book so when I give my clients a receipt I have a copy in addition to my computer record.

I don't do a website but mainly because I'm in a rural area where that kind of marketing just doesn't do as well. I tried signs in public spaces--only minimally helpful and classified ads were really not effective. Word of mouth is way better--better clients as well and an instant reference from the person who told them about me. Business cards could help you network with other providers and just people you know who know parents with children. Also consider joining a provider association--good way to get training hours, socializing with other providers and if they know you have openings they could refer parents that call them to you when they don't have any vacancies. Good luck!

3 moms found this helpful
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S.S.

answers from Chicago on

I had a separate account and did only childcare related expenses out of it. all groceries and stuff for the daycare (cots, toilet paper, toys etc...) also keep a box or file with all receipts in it. and make sure you mark each childs daycare payments in a ledger I had one that had 13 rows across. i had each childs name written down and would use up for lines down so that the weekly pay was written in and then at the end of the month the total for that would be entered across (I am not an accountant and there is probably a better system but it worked for me lol) flyers are good and you can put them up in supermarkets, churches sometimes local schools will take one also if your licensed. good luck

2 moms found this helpful
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G.B.

answers from Oklahoma City on

If you have a contract with the state to receive payment from them for children in your care then I will tell you the mistakes I made. In my center that I owned I spent some money on Newspaper ads, did a tiny amount of radio ads and not one person ever responded to them.

The people who use the state to pay part or all of their child care expenses can't afford those luxuries. If you have that contract then just make sure that the state office where women go to sign up for childcare assistance has your home on their list of approved care providers.

If you are going to rely on people to pay you out of their pockets for your care then be prepared to have long periods of time between parents seeking to do full payments. It seems like to me that nearly everyone I ever had come to my center qualified for some assistance. I think out of all my kids I only had 1 child that paid cash out of pocket and they could only afford 1-2 days a week for a period of about 4-5 months.

Do the bank account, keeping the funds separate makes it very easy for your CPA to see how much of your house payment, utilities, wear and tear on your property, home insurance, etc...can be a deduction. It also makes it easy to keep track of just how much money is going out and you can track it to see what areas you want to add more to or cut back. You can also leave a majority of it in the account and pay yourself a salary so you can do regular tax payments.

Get personal liability insurance. I carried mine through our car and homeowner insurance agency. No one ever sued me but if they had I would not have lost anything personal.

Look for a supprt group(?) for home care providers in your area. I was active in our local Directors group and I took classes all the time that helped add up to fulfill my 20 hours per year required of training to keep my license. I learned most of the financial aspects of the business from those classes. It also gives you a group of friends to call on if you are sick and need to know who to hire to substitute for you. Everyone needs a day off every now and then if even only for that wonderful yearly OB/GYN appointment we all love.

There are food programs out there where you can sign a contract and go by their guidelines and get reimbursement on your groceries. Such as buying only 100% juices, fresh fruit and fresh veggies, etc...the one I know of was called Little Dixie and is in Oklahoma. There must be something in your state too. Again the support group would have some of this information.

http://www.littledixie.org/ldcaaCACFP.html

Good luck having a fulfilling career and a lifelong joy.

1 mom found this helpful
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N.P.

answers from Chicago on

this is not needed at all

purchase this book and you will have all the info you need (correct info!! from the guy who got most of it passed or challenged!) http://www.amazon.com/Family-Record-Keeping-Eighth-Redlea...

when you do a home daycare you count up the hours you work and the amount of space you use to get a time space percentage - then you use that percentage to figure out how much of your utilities, real estate taxes, and other stuff to deduct. Obviously those are home expenses so having two accounts wouldn't help at all it would really just complicate the matter. Also with food you won't purchase separate for the daycare - that gallon of milk will be used by all. So how would you decide what to take out of that business account?

I use Quicken to keep track of my income and expenses. Save EVERY receipt even if you don't think it's daycare related. For parent payments I have a note pad that I divide across the top with dates and down the side with the parents names and amount due each week. I made a grid and fill in the blanks as the payments are made. I record the check number (or "cash") and the amount, noting if the amount is unusual for any reason (voting discount, late fees, extra day, vacation, etc.) At the bottom I write any income that we get from other sources that I deposit - bday gift money from Grandma, bonus from husband's job (or paycheck if not direct deposits), garage sale profits, etc. If you are ever audited they will look at ALL your deposits so having separate accounts will not solve that hassle.

Ok, so then I enter stuff into Quicken. It's really easy to do you just set up an "account" and add in your income and your expenses. After you read that book you'll understand all the things you can use as expenses - there are TONS.

I have a website http://www.freewebs.com/tarastoyland - feel free to browse through it, there is a menu, my contract, and much more on there and it should help you out. I also have a phone book listing. I cater to teachers so if I need daycare kids I go to the source and put fliers on the cars in school parking lots during school hours. But there are tons of websites to list your daycare. Do not pay for any, there are so many free ones. But the website and yellow pages are my main source of calls. If I have a weird timing opening I do craigslist.

Reading some responses I had to say - I set my rates high because I am an expert in this field. I have very rarely had any state assistance people even inquire and if they do I would make them pay the difference to get up to my normal income. No matter what have people pay IN ADVANCE.

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S.R.

answers from Chicago on

Hi,
I suggest you contact your local child care resource & referral agency. They can provide you with referrals, technical assistance, etc. I am also going to send you (offline) some info. about my home-based business, ParentLink Info Services, about the services/publications I have that may be useful to you as well. (And/or you can visit my website, www.metroprofiles.com, email me at [email protected]____.com, or call me at ###-###-####)

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