McCormick Institute for Early Childhood

BY Jane Humphries | October 3, 2023

This document may be printed, photocopied, and disseminated freely with attribution. All content is the property of the McCormick Center for Early Childhood Leadership.

The past few years have taken a significant toll on the field of early childhood care and education. Many programs have had to close, while others have re-opened or are new to the field and are struggling to survive. When talking with leaders whose programs are thriving, three strategies have emerged as keys to stability. These strategies include carefully managing cash flow, utilizing multiple payment options for tuition, and adhering to tuition policies and procedures. Let’s learn a little more about each strategy.


MANAGING CASH FLOW


Tuition paid by families is the largest revenue stream for many early childhood programs. This tuition, the foundation of a program’s budget, is distributed across the fiscal year and serves as the educated guess for income when operating a program. A budget guides income and expenditures throughout the year. Additional reviews by accountants provide insights based on the history of program budgets by analyzing and presenting numbers that help to determine actual costs. While all of this financial data helps to manage the overall fiscal operations of an early childhood program, why is managing cash flow so important?


Adequate cash flow keeps a program operating day-to-day. In some instances, this can include using a line of credit, should that become necessary. A cash flow statement shows what funds are immediately available for use. The statement, which reflects current amounts within similar budget categories and line items, reflects the mental exercise of going through all income and expenses to determine the dollar amount on hand at any given time. This provides the ability to know when actual funds arrive and when expenditures can be scheduled for payment and allows a program leader to manage cash flow proactively instead of reactively. Cash flow relies on receiving tuition in a timely, efficient, and predictable way. Having efficient payment options for families to utilize assists with this process.


OPTIONS FOR TUITION PAYMENT


Getting cash in the door quickly and securely is the next strategy. Today’s banking industry provides many options to small and large early childhood program businesses. Some of the most commonly used include:


Each one of these payment options has monitoring and cost considerations:

  • Bank drafts may not be funded if there are no funds in a family’s account, and follow-up would be necessary to include collecting fees potentially charged by banks.
  • Many love the ease of swiping a credit card or the use of popular online payment services to benefit from participation in reward programs. However, it may be necessary to charge the user ‘swipe or use fee’ percentage to offset the convenience of credit card use.
  • Automatic bill pay services secure funds as long as the amount due does not exceed the account balance. Too many overdrafts or insufficient fund fees may result in dealing with a family’s account switching to another payment method. This may result in family members playing “catch-up” on their tuition for a few weeks.
  • Payment by check is still accepted, which has resulted in programs utilizing bank apps to upload images of the checks within these apps to avoid trips to the bank and allow quicker access to the funds within the program account. While this means tracking checks and pursuing those presented with insufficient funds, it allows for quicker fund availability. Check for hidden fees as some banks may charge a small fee after a certain number of electronic deposits.
  • While cash apps are very convenient and have minimal fees, in 2023, the IRS now requires that any business transaction must be reported on a Form 1099-K if more than $600 is received. Cash apps may provide this service for a fee.
  • Accepting cash. Smaller programs may appreciate having cash in hand, while larger programs might prefer to avoid accepting cash payments due to the risks associated with having cash on the premises. A program may want to minimize the risk of theft or harm to an employee. Tracking cash payments for IRS purposes is also cumbersome if a system of accountability is not set up.


There are many options for receiving payments to have access to funds promptly. Choosing the best option requires understanding a family’s needs and utilizing effective tracking systems. However, none of this will work if tuition is not paid regularly. This is when a program leader must develop, implement, and enforce tuition policies and procedures.


TUITION POLICIES AND PROCEDURES


Collecting payments is vital to maintaining the financial health of any early childhood program. However, it is probably one of the least favorite roles of a program leader. Careful consideration must be given when creating tuition policies and developing procedures to collect funds. It is essential to have daily management practices and processes that minimize collection issues. Proper accounts receivable management allows program leaders and their staff to do what they love, be with the children.


Programs must have effective policies in place, and they must enforce them consistently. Inconsistent enforcement can result in a strain on cash flow. Managing the accounts receivable will always require time from a program leader. The first step is ensuring that effective policies are articulated and provided in writing to all family members or caretakers responsible for the child. Most programs have payment policies that impose significant fees for late payments. Those who do not pay can also face the possibility of children being disenrolled when payments are not received promptly.


For policies to be effective, program leaders must follow account receivable procedures regularly. Program leaders should allocate time each week to review the accounts receivable. Any outstanding balances should be dealt with by a formal written or electronic notification and personal contact by phone and during the morning or afternoon pick-up hours. While email collection notices or notes to families serve as documentation, these are easy to avoid and ignore. Speaking personally with each family member is more likely to yield results. Special arrangements can be considered for long-term families who communicate regularly, but they should be in writing and followed through.


CONCLUSION


Managing cash flow, offering multiple options for tuition payment, and staying on top of tuition policies and collection procedures are administrative leadership strategies to support program stability. Program leaders should not apologize for having consistent policies and procedures in place. By maintaining control of cash flow, program leaders have a better opportunity to provide a safe, stable early childhood program where children can grow and learn.


Want to learn more about Building a Sound Business Strategy? Check out our Aim4Excellence™ online professional development opportunity, and also consider joining us in February 2024 by attending, in person, Leadership Connections™ to learn how experts in our field are navigating these and other challenges. Mark your calendar for February 7-9, 2024, and watch for registration to open soon!


Jane Humphries, Ed.D., serves as the Aim4Excellence™ Program Specialist and curriculum developer for the McCormick Center for Early Childhood Leadership at National Louis University. She has written curriculum and facilitated online learning in graduate and undergraduate level courses since 2004. The Aim4Excellence program is the online National Director Credential recognized by the National Association for the Education of Young Children (NAEYC) accreditation and is incorporated in multiple state quality rating and improvement systems.

By Cara Murdoch February 16, 2026
In early childhood education and care (ECEC), we know that some of the simplest ideas can carry the biggest lessons—and many of us have been singing “The Ants Go Marching” for years without realizing it might also be a leadership guide. Ants may be tiny, but their colonies run on teamwork, communication, flexibility, and a clear sense of purpose—all things ECEC programs rely on every day. By taking a closer look at how ants work together to support their colony, early childhood leaders can discover practical and familiar ways to strengthen teamwork, value every role, and lead programs where everyone is marching in the same direction for children and families. Ants are busy creatures; they work with a purpose and know their jobs in the colony. Ants exhibit teamwork and collective effort. Ant colonies demonstrate intelligence, division of labor, communication systems, and cooperative behaviors. They can recognize and respond to the colony's needs. They overcome their challenges through trial and error, learning from their experiences, and sometimes even develop innovative strategies. In the ant colony, individual ants work together as a unit, each with a unique role that determines the colony's survival and success. The ant colony functions just like a superorganism, where the actions of each individual ant are a part of the highly efficient system that supports the whole colony. This concept of collective action is closely related to human teamwork! Ants have a lot to teach us, as we work in ECEC. teamwork Just as ants collaborate, relying on their communication and coordination to complete tasks, humans thrive when working together, as each individual brings their own unique skills and perspectives to their “colony.” Ants depend on each other. Each ant has a specialized job, and the colony relies on the cooperation and coordination of all its members to thrive and survive. Each ant’s contribution, no matter how small it may seem, is vital to the success of the colony as a whole, and the strength of the group is built on the cooperation of each individual. Similarly, in ECEC programs, teamwork — working together and helping one another —leads to better results than trying to do everything alone! When we collaborate, we pool our strengths, share our knowledge, and support each other, which can lead to more creative and efficient solutions. Each person in the program brings unique skills and perspectives, filling gaps and helping compensate for one another’s weaknesses. This shared effort allows your program to tackle tasks and achieve goals that would be difficult, if not impossible, for one individual to accomplish on their own... just like in an ant colony! Adapting to face challenges Ants are highly adaptable creatures. Have you ever watched a disrupted colony hurry to move the uncovered eggs to a protected space? They respond quickly to changes or disruptions in their environment. Their ability to quickly assess new situations and adjust their behavior will help the colony continue to function efficiently, even when the unexpected happens. Their adaptability is the key to their survival, allowing them to overcome obstacles and thrive. Early childhood programs also need to adapt to challenges. When unexpected changes occur, each person needs to be flexible and find new ways to contribute to the program's success. Just as ants adjust, programs must reassess their strengths, collaborate, and develop alternative solutions. Adaptability is essential for proper teamwork! honoring individual roles In an ant colony, different ants take on very specific roles. There are worker ants, soldier ants, and the queen ant. Each ant’s role is crucial to the success and survival of the colony, and all roles are interdependent; they work together to achieve common goals. This division of labor that exists in an ant colony can be compared to the different roles and unique talents found in an ECEC program. Just as ants rely on each other to perform specific tasks, each ECEC team member brings their own expertise and skills to the program. In a project or workplace setting, one person may excel at brainstorming creative ideas, another might be skilled at organizing tasks and managing timelines, and someone else may be particularly adept at technical skills or problem-solving. This diversity of roles within a team ensures that every aspect of a project or goal receives focused attention. In center-based programs, there are the director, teachers, kitchen staff, and other roles as needed. The diversity of roles in a program helps to ensure that the program is successful and thrives. clear purpose and goals In an ant colony, survival is the common goal. The colony’s success depends on each member performing its specific role. Their unwavering focus on the survival of the colony is connected to their success. It demonstrates the power of their collective action, driven by a clear and unified goal. ECEC programs thrive when they are aligned around a shared and clear purpose and goals. When program members understand and commit to their common goals, the well-being and growth of children and families, their efforts will become more effective and coordinated. Just as ants bring different strengths to the program, each person brings different strengths to the program. It is alignment around shared goals that enables the program to overcome challenges and succeed. When everyone in the program is clear on the goals and helps work together toward them, the whole program becomes more focused, resilient, and motivated - just as an ant colony becomes stronger when every member is working toward survival! Ants work together harmoniously to achieve their common goals; they set aside individual competition in favor of colony cooperation. Each ant focuses on its specialized task. This spirit of ant cooperation is key to the colony's survival and success, as it enables the colony to accomplish more complex tasks than any single ant could manage alone. ECEC programs can benefit from adopting a similar approach that emphasizes collaboration and shared goals over individual achievement. In an ECEC program, when members support each other and work together, they can leverage each person’s strengths to accomplish more than they could individually. Instead of competing for recognition or resources, each member can focus on the program’s success, fostering a more positive and productive environment. learning from ants Ants have so much to teach ECEC programs when it comes to cooperating and working together as an effective team. Whether it's knowing your own role and abilities, supporting each of your fellow team members, communicating clearly and effectively, being flexible, or avoiding competition, the ant colony is an excellent example of these qualities! Let your ants go marching!!! Ant Life, author unknown I am just an ant, A small life is what I live, But I have dreams for bigger things And so much more to give If only I could grow A foot or two would do I could live a life That others look up to.
Show More