The Best Accounting Software for Home Daycare: Take Control of Your Books
Key Takeaways
- Accounting software is designed to handle billing, invoicing and payroll automatically, saving businesses both time and mistakes
- Try to find software that handles attendance, makes parent portals available, tracks expenses and creates financial reports
- The best among them are QuickBooks, FreshBooks, Procare, Brightwheel and Xero
- The main benefits are more accurate results, better visibility of finances, proper tax compliance and simpler workflows.
- Prior to selecting software, make sure your needs are met, compare its features and test how easy it is to use and get help with it
Why Accounting Software is Important for Daycares
When you run a home daycare, caring for kids, planning fun things to do and keeping parents informed is a big part of your job. You certainly don’t want to spend your free time handling invoices, following up on payments and getting ready for tax time. That’s where accounting software for daycare business comes in.
Using specialized childcare accounting software helps automate routine tasks, saving you precious time and reducing the risk of errors. Instead of creating invoices yourself each month, the software will generate and send them automatically once attendance is recorded for each child. Your income and expenses will all be sorted and added up as soon as it’s time to file taxes.
You need strong bookkeeping to watch your daycare’s finances, decide what’s best for the business and meet mandated standards. Having all your information in accounting software makes it simpler to go through audits or submit documents for licensing. You’ll be glad you chose to use this tool.
Key Features of Daycare Accounting Software
Since there are many accounting software choices, how do you find the one that suits your needs? We’ll highlight some of the top things to check for now.
- Automated billing and invoicing
- You should be able to set up bills that repeat and have the software charge parents’ cards or accounts automatically. As a result, you won’t have to create and send invoices by hand with every billing cycle.
- Attendance tracking
- Directly adding children’s attendance to the software and having it appear in billing saves a lot of time. Choose a place that has an app for parents to use for checking their kids in and out.
- Parent portal
- Allow parents to see and pay bills, communicate with you and update their information using an online system. It helps everyone communicate better and leads to a smoother lifestyle.
- Expense tracking
- It is simple to capture your expenses for things like supplies, food, insurance and upkeep of the house and sort them into the right categories. Snapping pictures of your receipts is really helpful.
- Payroll management
- If you employ people, ensure that the accounting system can manage all their payroll needs.
- Financial reporting
- Produce profit and loss statements, balance sheets and reports showing expenses to check your daycare’s results.
- Tax preparation
- Auto tax calculations, report generation for 1099 forms and the ability to export your data to your tax preparer allow tax season to run smoothly for you.
- Integration capabilities
- It’s recommended that the accounting software can link with systems used for managing children, handling payments and processing finances. You don’t have to enter the same data twice.
Top Accounting Software for Daycare Bookkeeping
Based on those important factors, we will now look at some of the best accounting software for home daycares.
1. QuickBooks
Because it is so popular, QuickBooks includes many useful features that are easy to use. Although it wasn’t made just for daycares, its flexibility is a key reason many providers choose it.
QuickBooks
Suitable for service-based businesses needing streamlined financial management
Rasons to buy
- + User-friendly interface with real-time financial tracking and reporting
- + Automates invoicing, billing, payroll, and tax compliance
- + Customizable to fit specific daycare needs, including managing tuition, expenses, and staff payroll
- + Integrates with over 500 apps for enhanced functionality
Possible Drawbacks
- –File size and user limitations may hinder scalability for larger operations
- ● $35/month (Simple Start)
2. FreshBooks
FreshBooks is popular among home daycares because it is so simple to handle accounts. Having basic features needed by small childcare services at a reasonable rate is what it provides.
FreshBooks
At-home daycare providers, preschool administrators, and small service-based businesses needing simple accounting tools
Rasons to buy
- + User-friendly interface, ideal for non-accountants
- + Customizable invoicing with time tracking
- + Mobile app for managing finances on the go
- + Automated expense tracking and payment reminders
- + Integration with third-party apps (e.g., Stripe, PayPal)
Possible Drawbacks
- –Client caps on lower-tier plans
- –Advanced features only available on higher-tier plans
- ● Lite Plan: $21/month (5 clients)
- ● Plus Plan: $38/month (50 clients)
3. Procare
With Procare, you get a complete childcare management system that has fully built-in accounting and billing capabilities. Because of its complete features, it is a preferred option for mid-sized to large centers.
Procare
Best suited for: Childcare centers, daycare facilities, before/after-school programs, and youth organizations of all sizes
Rasons to buy
- + Comprehensive all-in-one platform
- + Contactless check-in/out options
- + No contracts, setup fees, or per-child charges
Possible Drawbacks
- –Limited admin-only messaging features in the app
- –Challenges with desktop-cloud integration
- ● Custom pricing based on business needs
4. Brightwheel
Tech-savvy daycare owners are quickly making Brightwheel their favorite choice. It includes simple ways to track bills and expenses when using the app.
Brightwheel
Brightwheel is ideal for childcare businesses such as preschools, daycares, after-school programs, and camps, ranging from small centers to large enterprises
Rasons to buy
- + All-in-one childcare management platform
- + Tailored expense management tools
- + Secure digital attendance and real-time updates for parents
Possible Drawbacks
- –Limited customization for calendar functions
- –Customer support issues reported by some users
- ● Pricing varies by enrollment capacity, ranging from $21-$24 per seat
5. Xero
For home daycares that are comfortable using technology, Xero is a simple and cloud-based program for accounting. It includes powerful accounting and supports many integrations with other tools.
Xero
Xero is ideal for small businesses, startups, freelancers, accountants, and bookkeepers seeking efficient, user-friendly cloud-based accounting solutions
Rasons to buy
- + Unlimited users across all plans
- + Intuitive design with minimal learning curve
- + Strong invoicing, expense tracking, and bank reconciliation features
- + Multi-currency support in premium plans
Possible Drawbacks
- –No direct customer support calls
- –Entry-level plan restricts invoices and bills
- –Unsuitable for large businesses with high transaction volumes
- ● Early Plan: $15/month
- ● Growing Plan: $47/month
Benefits of Using Accounting Software for Daycares
Implementing childcare accounting software can significantly transform a daycare business. You should notice some major improvements from using the guide.
Make Your Job Easier by Reducing Paperwork
Experts have found that small business owners may have to spend up to 20 hours every month on billing and bookkeeping. This usually means that daycare workers must spend less time on important duties such as caring for children. It has been found that using accounting software cuts down on administrative time by more than 80% which frees up hours that can be spent on better care and expanding the business.
Lessen Mistakes and Increase Precision
Sometimes, when calculating after a long day of childcare, humans make mistakes. Errors in your financial records are greatly reduced when you use accounting software. Business decisions will be more accurate and you’ll avoid issues with the IRS if you use correct books.
Stay Updated with Current Balances
No longer do you have to put your daycare’s finances together from bank statements and Excel; accounting software supplies clear reports showing the details. Check the profit you make, see if revenue is more or less than expenses, cut unnecessary costs and use your numbers to form new plans.
Make getting taxes ready quicker and easier.
Does it make you cringe to think about sorting your receipts for the year? All your income and expenses are handled digitally with daycare software and grouped by category. You can either prepare tax reports for your accountant or automatically send your data to tax software. You won’t need a shoe box full of receipts.
Rapidly Collect Payments
Trying to get your parents to pay your tuition isn’t enjoyable. Accounting software allows you to take credit card or bank payments through the parent portal and check which invoices have been viewed and paid. By processing payments instantly after an invoice, cash stays moving access payments as soon as an invoice is generated helps keep cash flowing.
How to Choose the Best Accounting Software
With the benefits clear, how do you actually choose the best free accounting software for home daycare? Take into account these main points first:
- Understand your daycare’s needs
- Think about how many children you serve, your monthly expenses, number of employees, growth plans, etc. This will help determine if you need a basic system or more advanced capabilities.
- Set a realistic budget
- The cost of accounting tools can be as little as $10 per month or as much as many hundred dollars monthly. Make sure to add the price for using multiple users, adding features or covering installation costs to your expenses. Remember, home renovations will save you both time and stress.
- Compare features
- Use the list we outlined before to make a checklist of your important needs, extra features you would like and functions you don’t require. Compare the plans well because a few do not offer all the features for everyone.
- Assess ease-of-use
- When you own a busy daycare, you need a system that is simple to pick up and use. Take the opportunity to try free trials and demos to check how easy it is to use each interface. Read the reviews posted by other providers as well.
- Evaluate support and training
- Even though some people will manage fine setting up themselves, most will rely on customer support to get going and solve problems. Find out if the provider has phone support, live chat, tutorials and training materials.
- Make sure data is secure
- You’ll be trusting this system with sensitive financial information about your business and clients. Ensure potential providers use industry-standard security practices like password protection and encryption.
How to Train Staff to Use Daycare Accounting Software Effectively
Congratulations, you have picked an accounting system! Once you have it, what do you do to make your entire team comfortable with it? Even if you don’t have others to teach you, take the time to explore the program to make sure you use it effectively.
You should first open all the menus and interact with all the buttons yourself. Although today’s programs are very easy to use, the finance terms can be unfamiliar to those working in childcare. Don’t worry, these are made for people who are not accountants.
Create a plan for implementing the new system:
- Gather your current accounting data like family info, attendance records, outstanding bills, etc.
- Block off a day to input all this data and familiarize yourself further. You might make some mistakes at first, but this is part of the learning process.
- If you have any staff, hold a training day where you walk them through the basics. Start with the functions they’ll use most, like checking kids in/out and logging payments.
- Compile resources like how-to guides or training videos. Designate a tech-savvy “expert user” who others can go to for help.
- Set a launch date to go live with the software and communicate it to families. They’ll likely be thrilled to access an online portal!
- Expect an adjustment period and be patient with your team. Continue coaching and offer refreshers as needed.
Keep in mind, your accounting software company wants you to use their product well. Use the support site, talk to service reps in real time and consider taking individual training sessions if available. It will be much easier in the future if you get things sorted from the beginning.
Common Bookkeeping Mistakes Daycares Make and How to Avoid Them
Even if you have a supporting software program, you can still make errors in accounting that may lead to big problems later. Daycare providers often make certain common mistakes, here are some ways to avoid them.
- Mixing business and personal expenses
- Using the same credit card for groceries and mulch can be convenient, but it’s harder to keep track of the money. Keep your business records clean by setting up a business bank account and credit card for your enterprise.
- Forgetting to track petty cash
- It’s amazing how much art supplies can cost when you buy them at the dollar store. Write down all your expenses and always keep copies of your receipts. Include your data in the software from time to time so you never lose it.
- Not reconciling books to bank statements
- Check from time to time that your accounts match the balances in your daycare’s bank statements. Any differences may indicate there are errors, something missing or possible fraud.
- Mis-categorizing expenses
- Treat every expense type according to the same rules and make sure you are clear. Was that meant for “meals and entertainment” or for a “snack”? You may get guidance from the IRS child care center expense categories.
- Not keeping adequate records
- Although software eliminates much of the paperwork, receipts, sign-in sheets and certificates still need to be stored. Whenever possible, store your receipts in the software and keep your records organized.
- Procrastinating and falling behind
- Taking care of so many kids all day can make you eager to skip bookkeeping. Yet, as with many problems, they’re far less scary if you take them on one small step at a time. Schedule yourself a weekly admin time and try to keep up with everything within a month.
Final Thoughts
Handling your finances as a home daycare owner doesn’t have to be difficult. Investing in the right childcare accounting software and committing to using it consistently can save you hours of tedious work and mountains of stress. You could quickly see how your daycare is doing financially and easily arrange for your child to enter and exit care.
Keep in mind that you’re supported on this path. Become a member of online forums where other providers talk, help each other and exchange ideas. Don’t forget to ask your software provider for advice – they want your daycare to do well. I wish us many more years of enjoying time with our snacks, circle moments and easy accounting.
Save on Accounting Software Today
Do you have Accounting Software in place for your daycare?
Choose the best Accounting Software and compare deals
Key Takeaways: POS systems are critical in bookstores to manage
Read more
What is Market Intelligence Software? Market intelligence software is a
Read more
In today’s increasingly digital and remote work landscape, virtual team
Read more
Why Do Customers Complain? Have you ever wondered why customers
Read more
