8.21 Process for Debt Collection

This procedure is new. Please read in its entirety.

In order to ensure that the neighbourhood nurseries work towards sustainability, it is essential that outstanding debt for nursery fees is collected as efficiently as possible. It is also important to look at the individual needs of families and identify payment plans with encourage prompt payment to prevent users falling further into debt whilst acknowledging that some families face ongoing financial difficulties. In light of this, and in order to ensure that customers of the nursery receive a fair and equitable service, this document outlines the process for debt collection and the creation and implementation of payment plans where appropriate, in discussion with nursery managers.

Customers are asked to pay nursery fees one month in advance. In the event of late payment of fees, to discourage parents from extending their debt and to reduce the end of year deficit, a £10 monthly charge is added. Outstanding fees of £200 or one month's fees are transferred to sundry debtors to follow up payment. Where debts exceed this level, the child's place may be withdrawn. The following stages should be implemented

In the event that a customer fails to pay their monthly fees, nursery managers should discuss with them the debt status.
If the fees remain unpaid, and the level of debt exceeds that outlined above, nursery managers should send customers the letter from Area Manager requesting immediate payment. They should also negotiate a payment plan with the service user.
Payment plans should have some degree of flexibility. However, in order to prevent further debt accumulating, payment plans should not exceed a period of 8 weeks. The total amount outstanding, including ongoing fees and late payment fee should, therefore, be paid within an 8 week period
Should customers default on the payment plan, the debt should be submitted to sundry debtors for collection and discussion should take place with the customer with regard to potential withdrawal of the childcare place.
An invoice for full payment will be dispatched by sundry debtors
If payment is not received within the thirty day period of receipt of an invoice, nursery managers will negotiate a date with customers from which the childcare place is to be withdrawn.

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