Recordkeeping Basics For Your Daycare

As a home daycare provider, you have two completely separate areas of your business to maintain. The first is caring for the children and the second is the recordkeeping for your business. Here are some recordkeeping tips for managing your business.

  You need to keep complete and accurate records, not only because the IRS requires it, but because it can help you save money by reducing your taxes.

  As discussed in my previous articles on Childfun, you need to save all of your receipts which are in some way related to your daycare (direct and indirect expenses), record all income received from parents and the Child Care Food Program, track the amount of time you are using your home for business, and the space utilized for your daycare.

  Try to make it a habit to request a receipt for anything you purchase and keep them all in one envelope. Once a week sit down with your receipts and your check book. Use a notebook broken into four sections (one for income from parents, one for income from the Food Program or other source, one for direct daycare expenses, and the last for indirect daycare expenses) and record your week on paper.

For expenses, list the date, the item purchased, the amount and the method of payment. Separate your receipts into each category and file in an envelope appropriately labeled.

  For income list the date it was received, the name of the parent who paid you, the child the care was provided for, and the amount paid. Record food income by date paid, source, and amount.

  A regular wall calendar is a great way to track your time. Simply record the time your first daycare child arrives and the time the last one leaves. Add to this any additional time you spend outside of daycare hours on projects related to the operation of your daycare.

  Recording everything on a weekly basis will allow you to create an organized recordkeeping system for your daycare business and will support your claims in the event of an audit.

Brigitte A. Thompson, President (WAHM of Sarah 1/93 and Jacob 4/97) DATAMASTER, LLC~

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