Inspirational and Empowering Child Care Business Owners To Build Successful Child Care Businesses

Posts tagged ‘recordkeeping’

Simple Strategies For Maintaining Receipts and Financial Records

The year was 1998 and I was only caring for one child. In fact, having one child enrolled, only brought in over $300 a month in income for my childcare business. That was not very much money to manage, however, it was a humble beginning and a start to managing income and expenses in my business.  Moreover, as the business grew, I realized the importance of managing my income and expenses.

In the start-up days of my childcare business,  I maintained my business expenses on a hand written ledger and I must say that I am so grateful for financial software today!

Over the years, I realized that if you did not keep a close eye on the financial status of your business and maintain your records, that you will not be prepared at tax time.

I am going to share with you six practical ways to maintain your receipts and financial records:

  1. Create folders for Business Income, Car expenses, food expenses, payroll taxes, credit card payments, utilities, classroom expenses, maintenance,etc. I think you get the picture. This system is great, in the event you need to review your expenses.
  2. Schedule a time once a week to enter your income and expenses into a computerized financial software program. When you enter receipts into the computer, the computer does the calculating and generates financial reports for you.
  3. Back-up financial records to a back-up hard drive. In the event of a computer, you will not be at risk of losing your financial records.
  4. Keep Financial Records for at least 10 years in the event of an Audit.
  5. Review your bank statements at least once a month, to assure that you have deducted  every possible business expense. This is a great way to find more expenses.
  6. Keep Your Payroll and Tax Return Records in a Locked file cabinet. This protects your employees identity and assures that no one has access to your tax information.

I look forward to your feedback on the record keeping strategies in this post. Be sure to leave your comment below.


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The Record Keeping Mistake That Cost Me Over $700

My Record Keeping Practices in my Home Daycare

In my home daycare, I was very diligent about keeping track of my food program records. In fact, every day during nap time, I reviewed my records to assure that they were accurate and at every monitoring visit, my food program representative was quite impressed at my record keeping practices.

As I write this blog post, it’s been over nine years since I’ve owned a home daycare and the only paper work that I remember maintaining was the daily attendance forms, food program enrollment forms, infant/child menus and maintaining food receipts. Also, I found it to be so simple that I kept my records in a large 3-ring binder.


My Record Keeping Practices in my Center

In 2002, when I transitioned into owning a Child Care Center, I was quite surprised at how much (food program) paper work that was required of Child Care Centers including: attending a food program orientation, daily meal count forms, monthly attendance sheet, weighing meat, child nutrition labels, Income eligibility forms, food program staff training log, enrollment roster, the parent letter, the statistics of the race of the children in our care, online claims and many other forms.

I must say that after about 2-3 months of maintaining Child Adult & Food Program records in my center, I was able to create a system that assured that my records were properly maintained. Moreover, my first two food program visits went very well. In fact, they went so well, that my visits were only scheduled every 2-3 years.

In August 2011, I received a letter informing me of an upcoming visit during the month of September 2011. The letter informed me of everything that needed to be done, in order to be prepared for the food program visit.

My Record Keeping Mistake(s)

During the visit, the food program specialist noticed that there was a shortage in milk purchases. I knew that could not be accurate, because we serve more than the required amount of milk and we never run out of milk. This is when I knew that I had misplaced some receipts or I did not adequately calculate how much milk that we were serving to the children.

Then she discovered that one of the family’s Income Eligibility forms was not up to date. I reassured her that the parent turned in the form. In fact, the form was turned in to me back in the summer of 2011. To be quite honest, summer times are so busy in my center that I could have misplaced the form!

So, I began to tell her, that I can prove the eligibility status of the parents income by the Subsidized childcare authorization and I requested more time to look for the IEF form. The representative asked, why did I want to show her the Subsidized Child Care form? I explained that during my last visit, the previous Food Program specialist informed me that she could use the Subsidized childcare authorization to prove if a family was low income or a “X” status.

The food program specialist began to tell me that my old food program representative gave me information that was not true. This is when I realized that this record keeping issue was going to cost me.

So she went on to say, that my receipts indicated that I did not buy enough milk for the month of August and I would have to pay back $111.00 to the Child Adult and food program.

Also, If i did not deliver the IEF (Income Eligibility form) for one of the families, that she would be required to change the family’s food program status from “X” (Free) to “Z” (Paid) status.

Now for those of you that may not know what this means; it simply means that the money that I received from the Child Adult and Food program for that family will have to be reduced, because there was not an  (updated) IEF form on file  for the family on the date of her visit (9/11).

In summary, the mother renewed her IEF form in 2010, but the IEF form for 2011 was not in my food program records at the time of the Food program visit. However, not having the update IEF form, caused for an adjustment in the funds that I received for the children between the months of  April-July 2011 and I was required to pay back over $600 to the Missouri Child Adult and Food Program.

What this Record Keeping Mistake Taught Me

This record keeping mistake taught me five things:

  1. After 13 years in this business that, I am not perfect and I will make mistakes
  2. When a food program specialist gives me information; verify it by reviewing the policies
  3. Once a month, review the annual dates on my IEF (Income Eligibility Forms )
  4. Calculate the amount of milk that is needed according to the number of kids in attendance and the required amount to be served to the children.
  5. File receipts away immediately after shopping, to prevent receipts from getting lost.

I hope that my Record keeping night mistake has inspired you to review your record keeping practices and to become familiar with what is required of you, in your food program record keeping practices.I shared this mistake with you, because mistakes are what help us to grow and improve in the business of childcare. After all, it was my mistakes, challenges and struggles that inspired me to write this blog.

Feel free to leave your comments below.



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