Bookkeeper for Preschools

How does money come in for a preschool?

Your revenue is mainly tuition, but you may also collect registration fees, late fees, subsidy payments, food program reimbursements, and summer camp fees. Each of these arrives on a different schedule and needs its own income line so you can see where your money actually comes from.

• Tuition, billed weekly, biweekly, or monthly depending on the family.
• Registration and enrollment fees, charged once when a new child joins.
• Late pickup and late payment fees, which add up.
• Subsidy income from state vouchers, Head Start, or scholarships.
• CACFP meal reimbursements from the federal food program.
• Summer camp or extended care fees.

Subsidies and reimbursements are the tricky ones because they do not arrive on a set schedule. A state voucher might come in months after the care was provided, and a CACFP check depends on how many meals you actually served. If those are not tracked separately, your cash flow will always be a surprise.

What are the biggest expenses?

Payroll is almost always the largest expense, but rent, food, insurance, and licensing fees add up quickly. You also have training costs for staff, marketing, and professional fees.

• Payroll, including salaries, payroll taxes, and benefits.
• Rent or mortgage and utilities.
• Food and classroom supplies, with snacks and meals separated from materials.
• Insurance, covering liability, workers comp, and property.
• Licensing and compliance fees.
• Staff training, such as CPR certification and background checks.
• Marketing and advertising.
• Professional services like accounting and legal advice.

Larger purchases, like playground equipment or furniture, need to be capitalized and depreciated over several years rather than written off in one year. That keeps your monthly profit numbers honest.

What bookkeeping mistakes do preschool owners make?

The most common mistake is mixing personal and business money, often by depositing tuition into a personal account. That blurs every number and can cause problems at tax time. The costliest mistake is ignoring accounts receivable, letting families fall 60 or 90 days behind.

• Mixing personal and business bank accounts.
• Not separating subsidy income and CACFP reimbursements from tuition.
• Letting accounts receivable stretch to 60 or 90 days.
• Underpaying yourself and treating whatever is left at the end of the month as your salary.
• Doing the books only at tax time instead of monthly.

What should I track separately in my books?

Subsidy income, food program reimbursements, and summer camp revenue each need their own chart of accounts lines. Tuition should be broken down by program, such as infant, toddler, and preschool, so you can see which classrooms are actually profitable.

Keeping these lines separate is not just about neatness. It is about the audit trail. If a state auditor asks how you spent a voucher payment, you can point to the exact line. That protection matters more as you grow.

Which reports should I look at each month?

A profit-and-loss statement and an accounts receivable aging report are the two you should review every month. The P&L shows whether you are making money overall, and the aging report shows which families are behind on tuition.

• Profit-and-loss statement, to see if tuition and fees cover your costs.
• Accounts receivable aging, to spot families who are 30 to 60 days late.
• Subsidy and reimbursement tracking, to know when that money is coming and whether you are leaving funds on the table.
• Cash flow projection, to plan for the slow summer months or a big equipment purchase.

These reports drive real decisions. If your P&L shows a loss in the toddler room, you might raise that rate or change the staff-to-child ratio. If the aging report shows long overdue balances, it is time to tighten your collections policy.

How do subsidies and food program reimbursements work?

Subsidy payments from state programs arrive on their own schedules, sometimes monthly, sometimes quarterly, and they come with their own paperwork. CACFP reimbursements depend on your attendance and meal counts, so you need to log those daily. Both need to be tracked separately from tuition, or your numbers get messy and you risk losing funding.

A common practice is to set aside 20 to 30 percent of profit for quarterly taxes, but check with your accountant to know what applies to your situation. The key is that subsidy and reimbursement income is not the same as tuition. It has rules, deadlines, and reporting requirements that do not apply to regular parent payments.