If you run an early childhood education business, you love children and want to care for them. You also want to be successful and run a profitable business and the two should go hand in hand. And of course, if you love what you do then you are not really working, as the saying goes. Yet, this is not exactly true because running a childcare comes with a lot of responsibilities – not matter how much you love it. From training the right people and making a profit to handling accounting paperwork – it isn’t always easy. Yet, with the right help your business is more streamlined and easier to handle. Here is more on salaries in early childhood education and what you can do to save time, increase profitability, and focus on other important aspects of your business.
What Makes a Successful Early Childhood Education Program
There are a few core components of a successful program. These include things like interpersonal interactions, physical environment, and program support structure.
According to American Progress:
A high-functioning operating environment is an essential element of a quality early childhood program. This administrative operational support takes a number of forms. First, programs need effective leaders who can provide instructional support to teachers as well as sound business management to the overall program. These multiple leadership functions are complex and often need to be fulfilled by more than one person. Second, external to the immediate program, programs need a series of structural supports, including access to professional development, quality improvement resources, stable and sufficient funding streams, and a pipeline of well-trained teachers. These external supports recognize that early childhood programs do not operate in a vacuum and rely on the wider early childhood system.
As you can see from the experts, it takes more than one person to take care of the administrative duties and this includes the accounting procedures. Also, all of the mentioned components mean a more quality program. Having the best teachers available means you have part of what you need going for you but without being able to sufficiently give raises or increase benefits may lead to a high turnover rate, which is mentioned below.
Salaries in Early Childhood Education
One of the major components of early childhood education is handling the salaries of your employees. Along with things like overhead, expenses, and tracking payments, employee salaries is a crucial part of any daycare or early childhood education business.
One thing that you may already know is that early childhood education often comes with a lot of turnover. In fact, staff turnover in early childhood education averages 30 percent per year according to the National Association for the Education of Young Children (NAEYC). That makes it harder to focus on other accounting areas and can make your paperwork a nightmare.
Salaries Include More Than Just a Paycheck
One of the major issues with salary accounting is that it is not just as simple as figuring out hours worked and a paycheck. There are other components that are integral to the process. This includes knowing about tax laws and other areas that aren’t so black and white. For instance, a typical payroll entry may include things such as:
- FICA tax payable
- Federal income tax withholding payable
- State taxes
- 401K (if applicable)
- Health insurance (if applicable)
- Wage garnishment (if applicable)
- Net pay
And all of that is based on each paycheck. This is not even counting bookkeeping for your salary records or end of the month/end of the year accounting. In fact, payroll records need to be kept up to date and for each employee and the following information is crucial:
- Employee name
- Social security number
- Offer letter
Time-related information should include:
- Total hours worked each day
- Time and date of the beginning of the work week
- Total hours worked each payday
- Attendance and time records
Along with all of the previous information for the payroll records is pay-related information. This includes:
- Employee’s pay rate
- Regular pay rate
- Daily totals of straight-time earnings
- Overtime earnings for each pay cycle
- Wage additions such as a bonus
- Payroll deductions (garnishments, benefits, etc)
- Expense reimbursement forms
- Raise documentation
- Income withholding orders
- Payroll advance agreements
- Form W-2
- Form W-4
- Date the wages are paid
- Direct deposit authorization
- Income withholding orders
- Time off history
- Employee’s remaining time off
As you can see, the paperwork is immense and just doing payroll alone can take hours depending on how many employees you have and other factors. Combined with taking care of other business matters and you may not have as much time as you’d like to focus on expanding your business, day-to-day operations, and growing your relationships with students and parents, as well as your own employees.
Even smaller childhood education programs should consider using outside help with paperwork. This frees up time and helps mitigate crucial mistakes that can be costly in the long term. And if you are a larger program, then an accounting firm, especially one that specializes in childcare-related businesses, is imperative.
Solutions in Accounting
Sometimes the best thing you can do for your peace of mind is to allow someone else to handle your early childhood education accounting. Not only are salaries a part of what is included but there are other components as well such as:
- Payroll Processing
- Tax Preparation and Compliance
- Monthly Reporting
- Invoicing and Receivables
- Quarterly and Annual Forecasting
- Profitability Coaching
How It Works and What We Do
There is plenty that we can do to help you with salaries in early childhood education as well as all-things accounting. We can showcase your profitability outlook and see if a raise to your employees is something that is doable.
We work to give guidance on when it is the right time to raise your rates and how that will affect your business. While a rate increase may seem like something that may drive away clients, that is not necessarily true and that is why you need a professional to show you when it is best to do so and when it’s best to hold off on any changes in tuition.
Invoicing and keeping up with clients is another area that can be overwhelming and tedious. This is an area where we shine and make sure that we take that headache away from you so you can focus on other aspects of your early childhood education business.
And last but not least, growing your business and increasing profits is paramount in being successful and this is an area where we help you find the right answer. Not everyone who runs a business is an expert in accounting and that is understandable. Yet, growing your business and being successful is what everyone strives for in their career but may not know how to make that happen without professional help.