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Sage Accounting Is Centered On Payers Instead Of Families
Childcare management software accounting is usually centered on families. You enter the family first, and then you enter the children and account payers under that family umbrella. The biggest problem with this type of setup is that multiple payers on an account, such as state subsidies, divorced parents, and social organizations are all grouped together on one ledger, which greatly complicates accounts receivables. Not only is this different from how accounts receivables are treated in accounting systems, you must also be extremely careful to separate the charges and payments from each payer on that family ledger. Additionally, if the payer charges are unrelated, such as a fixed copay and a state subsidy based on daily attendance, you cannot simply split the bill by percentage. Other issues in using this type of setup include getting totals for how much subsidy programs owe your center, and having the ability to split charges on accounts after the fact.
Childcare Sage accounting is centered on payers, like all business accounting software. Each payer has their own account and ledger, and payers can be grouped and categorized. You can also link payer accounts and charges together, and subtract one from the other. For billing, you can print exact bills and account summaries for each payer.
Another benefit of a payer centered system is that it automatically separates the charges and payments for each payer and keeps their ledger accurate. When a payment is received, you don't enter it into the family ledger and then flag or mark it as a subsidy payment. You record it into the Subsidy account directly. This greatly simplifies accounting and bookkeeping.
The following are some scenarios that show the benefit of a payer centered accounting system:
1) You have a state subsidized child. The parents have a fixed copay, and the state pays a daily rate for each day the child is at the center, including 3 absences per month. At the end of the month, the state owes their balance minus the parent copay. Because the Childcare Sage is payer centered, you can set up the subsidy account for that child to charge for each day attended plus up to 3 absences per month. You can set up the parent account to charge a fixed copay each month. You can then link the 2 accounts so that the parent copay is automatically taken out of the subsidy charges for the month. Since you can group the payer accounts together, you can also print reports that show how much the state subsidy owes for all the subsidized children at the center.
2) You have a child with divorced parents. Each parent pays 50%. Because the Childcare Sage is payer centered, you can set up 2 payer accounts for the child, one for each parent, and each charging 50% of the bill. As each parent makes a payment, you record their payment into their account so you have an accurate record of what they were charged, what they payed, and how much they owe. At the end of the year, each parent gets their account tax statement which shows how much they paid over the year.
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