Cash Flow Forecast Template for Daycares

A daycare’s costs are set by ratios: a fixed number of teachers for a given number of children, whatever the monthly income. Tuition usually arrives monthly, but government subsidies may pay in arrears, and enrolment falls in the summer and rises in September. A cash flow forecast built on enrolment shows whether each month covers payroll, and how many places need filling to break even.

Why daycare cash flow is different

• Staffing is set by ratios. Teacher payroll is the largest cost and can’t fall much when enrolment dips.
• Enrolment is seasonal. Children move to school in September, and summer attendance often falls.
• Subsidies can lag. Government childcare funding may be paid after attendance is reported.
• Registration fees are lumpy. Many centres charge them in late summer for the new year.
• Regulated costs. Licensing, inspections, food programmes and insurance are required, not optional.

A worked example

A centre has 62 enrolled children paying average tuition of $1,150 a month. It enrols about two new children a month and 2 percent leave monthly.

Every child enrolled adds about $1,150 a month, while an extra teacher costs far more. Because ratios step up in whole teachers, the centre is most profitable just before it needs its next hire, and least profitable just after. The forecast helps owners time new hires to enrolment steps, rather than hiring ahead of children who haven’t signed up yet.

How to build a daycare cash forecast

1. Start from current enrolment and average tuition.
2. Forecast new starts and leavers, with the September intake and summer leavers.
3. Enter subsidies in the month they’re actually paid.
4. Add registration fees and food programme reimbursements.
5. Add teacher payroll based on ratios, rent, food, supplies, licensing, insurance and utilities.
6. Keep a buffer for the summer months.

Common mistakes

Hiring for full capacity before enrolment reaches it. Counting subsidies in the month of attendance when they pay later. Forgetting annual licensing and insurance. And assuming full attendance in the summer.

What the template gives you

The Daycare & Childcare template includes an Enrolment tab that calculates children enrolled and tuition from starting enrolment, new starts, leavers and average tuition. Registration fees and subsidies have their own lines, and scenarios show the effect of slower enrolment.

Key assumptions built into the Daycare & Childcare template

• The Enrolment tab builds “Tuition fees” from enrolled children: 62 at the start, new enrolled children each month, 2% leaving each month and an average of $1,150 per child per month. It shows enrolled children lost, enrolled children at month end and revenue, so you can see exactly what a change in churn is worth.
• 4 cash in lines and 7 cash out lines are already named for daycare & childcare businesses, and every one can be renamed or extended.
• The example figures follow a typical daycare & childcare year, busiest in September and October and quietest in July and June, so the tight months show up where they usually fall.

Every assumption sits in a yellow input cell, so you replace the example with your own numbers in minutes. The same figures flow through a 13-week weekly view, a 12-month monthly view and a 3-year outlook, and a dashboard shows your lowest balance, the weeks that fall below your minimum buffer and your cash runway.

Free or premium?

If you only need the basics, the free 12-month template or the free 13-week template will get you started today. The premium Daycare & Childcare template saves the setup time and adds the tabs above, best and worst case scenarios, and an actual vs forecast tracker that shows where your forecast was wrong, so next month’s is better.

Daycare & Childcare cash flow forecasting: questions

How many children does a daycare need to break even?

Divide monthly fixed and staffing costs by average monthly tuition per child. Because staffing is set by ratios, break-even usually rises in steps as you add rooms or teachers.

How do childcare subsidies affect cash flow?

If they’re paid after attendance is reported, you fund those weeks yourself. Enter them in the month they arrive, not when the care is given.

When should a daycare hire new staff?

When enrolment is confirmed and ratios require it. The forecast shows whether current tuition covers the extra salary.