Article Link: http://exchangepress.com/article/momentum-losing-money-making-money/5007628/
Where have all the dollars gone? You were so sure that the tuition rate you established was competitive, yet fair. You've controlled your expenses. So why isn't your center earning what you expected? It may be that two important factors have not been considered. The first factor is discounting and the second is ancillary programs.Discounting
Most child care programs offer discounts for employee children, multi-child families, vacations, and/or absenteeism. Often these discounts are deducted from tuition fees prior to recording income. When this bookkeeping procedure is used, the center's financial statements will not contain important information concerning the actual cost of discounting. A $65 tuition fee may result in $57 of actual income after discounting. It's best to have your profit and loss statement show the full tuition amount and to account for each of the discount categories. Ancillary income programs can help recover losses due to discounting.
Ancillary Income
Centers that lose $8 to $10 of income to discounting can recover the loss and actually improve on it by offering well planned ancillary programs. Ancillary income is the money centers generate from sources other than normal tuition fees. These programs add ...