Is It Time to Go Digital? Here Are 3 Reasons Child Care Centers Should Consider It Now
“Going digital” has long been a topic in technology sectors—many consider it old news. But when you look beyond the “typical” tech, there are industries that are just now starting to see a shift in how they operate to be more efficient, agile, and data-driven. One of these industries is child care.
The child care industry has been slower to adopt digital technologies, and while we don’t have exact numbers, it’s safe to say a significant portion of centers still use a “pen and paper” approach. For example, many centers have parents sign their children in on a clipboard, manually track expenses in a spreadsheet, or even write personal checks to cover payroll.
This approach may have worked for many years—and it may still work for in-home daycares (kind of)—but child care centers that want to position themselves for growth and be able to navigate the unforeseen challenges, like those presented by COVID-19, are pivoting to a more digital-based model.
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So, why should businesses that have been slower to adopt new technologies consider doing so right now? Let’s focus on three trends we’re seeing and how they apply to one of the top operational challenges among child care centers: payroll.
Running a business requires a lot of moving parts and pieces. Running a small business means those parts and pieces are managed by fewer people—and that can get cumbersome, particularly when your job is to provide care to young children all day.
In today’s environment, being able to hire someone to manage payroll can often be a nonstarter for child care centers. Their margins are already tight (estimates put average profit between 15–30%, and that’s pre-COVID), so adding headcount often doesn’t make financial sense. This is where payroll software is a game-changer, because once it’s set up, it can completely automate the payroll process, reducing time spent on payroll by 45%.
There’s also the issue of compliance. Child care centers are masters at adhering to policies and licensing requirements mandated by the state regarding the number of children allowed per teacher, cleaning procedures, etc. However, on the business side, they may not know that it is just as important to maintain clean and easily trackable payment records. Manually tracking payroll can lead to errors, which in turn, can lead to hefty fines from the IRS.
For a center that may not have a lot of liquidity, IRS fines can result in dire consequences. With payroll software, calculation, payment, and filing of federal, state, and local payroll taxes, as well as W-2s, 1099s, and new hire forms are all automated—significantly reducing risk.
2. Contactless technology
Contactless business practices are nothing new, especially in payroll. Businesses appreciate the ability to have their payroll calculated and paid out automatically—which, again, saves time—and employees appreciate the ease of having their money deposited directly into their account. But now, contactless is taking on new meaning during the COVID-19 pandemic.
Reduce in-person interactions
By turning to contactless payroll technologies, child care centers can reduce the number of in-person interactions while eliminating the need for paper checks. That means not touching any checks or envelopes, and employees don’t have to go to the bank to deposit the funds. It’s safer and a lot more convenient.
3. Integrated software
Child care owners get into the industry because they love working with children. The vast majority don’t have extensive business backgrounds, which means the operational/financial side of the business can often be overwhelming. Without any child care management software, centers are now realizing how difficult it is to run business processes manually when a pandemic is forcing changes on an almost daily basis.
Payroll + child care management software
A software-based payroll system can not only make payroll a lot easier, it can also combine with business management software for more integrated, seamless operational processes. In the case of child care, centers are adopting child care management software—which can handle anything from check-in and check-out, staff scheduling, billing and tuition payments, financial reports, parent communication, and more.
Pairing a child care management software solution with payroll software that can sync employee time sheet data to calculate and disburse paychecks automatically makes the two systems even more powerful and useful.
And today, given how quickly child care workers’ hours and schedules can change due to staff or child illness, it’s much easier to recalculate payroll when those schedules within the child care management software are synced to the payroll system.
When thousands of child care centers across the US closed their doors in March 2020, many were forced to go into their facilities to continue managing their businesses and making payroll. This was the impetus for many to explore cloud-based software technologies like payroll and child care management software—solutions that pair well together and can be accessed from anywhere with an internet connection.
The COVID-19 pandemic has accelerated the need for child care centers to modernize their business practices. And while they may have been hesitant to shift to a digital business approach, child care centers are now realizing how much easier, safer, and more efficient it is to run their businesses when they use solutions like cloud-based payroll software.
When child care centers spend less time focused on the operational side of their businesses, they can spend more time cultivating environments that support the growth and development of the children in their care. And that is the linchpin that drives success for every child care business.