«TOOLS TO HELP FAMILY CHILD CARE PROGRAMS CREATE BUDGETS (FAQ, Templates, Samples) 1. Why have a budget? As a provider, you may be thinking “I get ...»
If, in the process of doing a review of actual expenses and budget (estimated amounts), you realize that you were significantly off in budgeting (estimated amounts), such that it will have a large effect on the accuracy of your budget for the rest of the year, you may want to make a budget adjustment. This could be done by creating an adjusted budget line item [you add/subtract the amount of the adjustment as a line item on the budget to show the adjustment]. You may also want to make a note for yourself to pay attention to this category of expense/income when creating the following year’s budget so you can adjust your accuracy with the additional information you have.
If this provider knew that her food expense was going to remain at a higher level for the rest of the year, she may want to adjust her food budget amount. Food expenses could be higher because, for example, she enrolled several more children.
Then, when the provider was comparing the actual expenses and budgeted (estimated) amounts, she would add the budgeted amounts in BOTH food line items and compare it to her amount of actual expenses that were spent.
YoungStar - Tools to Help Family Child Care Programs Create Budgets – Page 5 of 7
7. Does any of this have to be on a computer?
No. YoungStar does not require providers to use a computer or computer software to track their budgets. YoungStar provides worksheets for providers to use to create budgets and track actual income/expenses. Though many providers find it useful to use computers, paper and pencil is just fine.
8. This is my personal information -- why do I have to show it to anyone?
The information YoungStar is looking for with the budget indicator is the family child care business’s information – not your personal financial information. The budget does not have to include personal income/expense line items or spouse’s income. Providers can choose to include this information if they wish or if they think it will help them have a more accurate financial picture.
The reason for focusing on the family child care business’s income and expenses is to help providers see if the business is covering its own expenses with the money brought in.
9. How can I make a budget when payment is now linked to attendance -- I can't predict when kids will be here and when my budget will be off if I guess wrong because the state will only pay for the days the kids are here.
Once a provider has a general sense of the amount of care or hours that have been approved for a family using Wisconsin Shares, the provider can calculate a daily, weekly or monthly rate of reimbursement and enter the budgeted amount.
Because child care attendance can be an up and down affair, Tom Copeland suggests budgeting attendance income with a cushion – in other words, don’t plan to be 100% full all the time. YoungStar provides some worksheets for providers to help estimate their attendance income (http://dcf.wisconsin.gov/youngstar/pdf/b_creating_budget_family_template.pdf or http://dcf.wisconsin.gov/youngstar/pdf/b_creating_budget_family_sample.pdf with that cushion in mind. In addition, providers may consider policies and procedures which help educate parents about the impact of those missed days of child care.
10. How often do I have to compare my budget estimates and actual income and expense amounts for each star level?
At the 3 and 4 Star level, YoungStar requires that providers compare their estimated (budgeted) amounts and actual income and expense amounts spent once a year. This can coincide with the creation of their new annual budget for the next year.
At the 5 Star level, YoungStar requires that providers compare their budget (estimated) amounts and actual income and expense amounts twice a year – at the end of six months and again at the end of the year. This is to ensure that programs at this higher level are creating a fuller picture of their financial situation to be used for planning purposes.
11. Is anyone looking to verify if my budget is accurate? What if I budget incorrectly for this year's supply category? Am I going to get docked?
Technical Consultants and Formal Raters are not judging the amounts in the categories. If programs have identified working on budgets as an area of concern, Technical Consultants may ask clarifying questions to help identify any issues arising from the budgeting process, but it is up to programs to decide what line items are included in the budget and what amounts are assigned to each line item.
YoungStar - Tools to Help Family Child Care Programs Create Budgets – Page 6 of 7 Programs are encouraged to revisit their budget comparison information regularly to learn from them and create a more accurate picture of the program’s financial well-being.
12. What resources are out there to help me with this?
YoungStar Business Practices workshops are available. These full day workshops offer support and resources for budgeting as well as other YoungStar business practices. Check with the local CCR&R for dates and times offered in your area.
The Wisconsin Women's Business Initiative Corporation (WWBIC) is an economic development corporation providing quality business education, technical assistance and access to capital for entrepreneurs. Established in 1987, WWBIC consults, educates and mentors owners of small and micro businesses throughout Wisconsin. They concentrate their efforts with women, people of color and those of lower incomes. WWBIC offers free and low cost training, help to write a business plan and a profit and loss template on their website. http://www.wwbic.com/ Also, look for classes or workshops on business practices offered at technical colleges, banks, credit unions, CCR&Rs, WECA, Wisconsin Family Child Care Association (WFCCA), or The Registry. In addition, a Technical Consultant can also offer business practices support or help find additional resources, like Family Child Care business practices kits available for purchase.
Tom Copeland’s books, Business Planning Guide and Money Management & Retirement Guide, are excellent resources. Worksheets and step by step instructions to help providers understand more about their money are included. They are available for purchase at http://www.redleafpress.org/ or may be lent from your local CCR&R library or from the Child Care Information Center (1-800-362-7353) http://dpi.wi.gov/rll/ccic/index.html
From CCIC’s website:
How much does borrowing cost?
Materials are shipped to you at no charge. Your only expense is the cost of mailing borrowed items back to CCIC.
How long may I keep a library item?
You may keep DVDs for one week and other items for two weeks. If you need an item for a longer time, please let us know. Arrangements can be requested for a longer loan period if no one else is waiting for that item.