Childcare & Education
Enrollment-based revenue recognition, tuition tracking, and educator payroll for childcare centers, tutoring services, and schools.
The Industry
Childcare directors and school administrators didn’t get into education because they love accounting. They care about curriculum, child development, and creating safe learning environments. But running a childcare center or private school means managing enrollment deposits, tracking tuition payments, handling staff payroll, and staying compliant with licensing requirements. The business side demands attention whether you trained for it or not.
The financial structure of education businesses differs from typical service companies. Tuition arrives in advance but the service happens over weeks or months. Enrollment fluctuates seasonally with families moving, summer breaks, and school year transitions. Staff ratios are mandated by law in childcare settings, which means payroll costs are directly tied to enrollment capacity. These dynamics create cash flow patterns that need proper tracking to manage well.
Who This Covers
Who This Covers
Childcare centers, preschools, tutoring companies, music schools, driving schools, dance academies, test prep services, and independent private schools. Education businesses throughout the Merrimack Valley and Greater Boston where tuition and enrollment drive the financial picture.
What Makes It Complex
What Makes It Complex
Tuition paid upfront for services delivered over time. Enrollment deposits that may or may not convert to full students. Registration fees separate from tuition. Sibling discounts and scholarship adjustments. Staff ratios mandated by licensing. Part-time instructors and full-time teachers with different pay structures. Government childcare assistance programs with their own billing requirements.
What We Handle
Tuition revenue needs to be recognized when earned, not when the check arrives. A family paying $12,000 in September for the full school year cannot be recorded as $12,000 in income that month. We set up your books to spread that revenue across the months when you actually provide the service. This gives you accurate monthly financials that reflect true business performance instead of wild swings based on when families happen to pay.
Education businesses have payroll complexity that general businesses don’t face. Childcare centers may have lead teachers, assistant teachers, and aides all at different pay rates. Tutoring services often mix W-2 employees with 1099 contractors. Music schools might have instructors paid by the lesson. We handle the payroll setup, classification questions, and compliance filings so your staff gets paid correctly and you stay on the right side of employment regulations.
Tuition and Enrollment Tracking
Tuition and Enrollment Tracking
Revenue recognition for prepaid tuition spread across service periods. Enrollment deposit tracking showing which deposits convert to full students. Family account management with sibling discounts and payment plans. Aging reports on outstanding balances with systematic follow-up. Registration fees and material fees categorized separately from tuition revenue.
Staff Payroll and Benefits
Staff Payroll and Benefits
Payroll for teachers and staff at various pay rates and schedules. Worker classification guidance for part-time instructors versus independent contractors. Tax withholdings and filings handled including Massachusetts-specific requirements. Benefits tracking if you offer health insurance or retirement plans. Year-end W-2s and 1099s prepared and filed on time.
What Goes Wrong
The most common mistake is recording tuition when received instead of when earned. A childcare center that collects $50,000 in September tuition looks incredibly profitable in September and barely profitable in March. Monthly financials become meaningless because they reflect payment timing rather than actual business performance. This makes it impossible to know if you’re truly profitable or just experiencing cash flow distortion from prepayments.
Music schools and tutoring companies frequently misclassify workers. That piano teacher who sets her own schedule and teaches at multiple locations might legitimately be a contractor. But the math tutor who works only for you, at your facility, on your schedule is probably an employee regardless of how the paperwork is structured. The IRS and state labor departments care about the reality of the relationship, not the label you put on it. Misclassification leads to back taxes, penalties, and unhappy auditors.
Distorted Financial Picture
Distorted Financial Picture
Tuition recognized when collected creates income spikes in fall and dips in spring. Monthly performance becomes unreadable because numbers reflect enrollment cycles not operational health. Decisions about expansion, hiring, or programs get made on misleading data. You might think January is a terrible month when really it’s just that tuition was collected in September.
Worker Classification Exposure
Worker Classification Exposure
Part-time instructors classified as contractors when the relationship looks like employment. No distinction between the instructor who teaches at five studios versus the one who works exclusively for you. Payroll taxes not withheld creating liability when the classification gets questioned. 1099s issued for workers who should have received W-2s.
What Changes
Monthly financials show actual performance. Revenue matches service delivery so you can see which months are genuinely strong and which programs are profitable. You can evaluate whether the summer camp makes money or just keeps the lights on. Expansion decisions are based on real numbers rather than cash flow distorted by tuition timing.
Tax season becomes straightforward because the books are already organized correctly. Revenue is recognized properly, expenses are categorized, and worker classifications are defensible. Your accountant receives clean financials with supporting documentation. Quarterly estimated taxes are calculated based on actual business performance, not cash flow that looks nothing like real income.
Program-Level Profitability
Program-Level Profitability
See which programs and services actually make money after accounting for instructor costs, materials, and allocated overhead. Evaluate afternoon tutoring versus weekend test prep. Understand whether infant care or preschool drives your margins. Make pricing and program decisions based on actual profitability data instead of gut feelings.
Seasonal Cash Flow Planning
Seasonal Cash Flow Planning
Forecast enrollment cycles and plan cash reserves for slow periods. Know how much September tuition needs to carry you through winter months. Build reserves for summer when enrollment typically drops. Stop being surprised by predictable seasonal patterns because you can see them coming in the numbers months ahead.
The Merrimack Valley's Trusted Accounting Partner
The Next Step:
A 15-Minute Call
Tell us about your business and what you're dealing with. We'll listen, ask a few questions, and give you a straightforward quote.