The last three days of every month
The invoices go out on the first. So in the last few days of the month the manager, or the owner, sits with the booking sheet, the funding list and last month's invoices, and works through every family. A child booked three full days a week who gets funded hours stretched across the year. A sibling who only takes the funding in term time. A family who added an extra afternoon mid month. A child whose funding started halfway through because they had a birthday.
Each one is a small calculation. Together they are a long evening, and there is always one invoice that comes back with a polite email from a parent who has done the maths differently. Usually they have a point, and the corrected invoice goes out a week late.
Your nursery software may produce invoices, but somewhere in the chain there is a spreadsheet where the funded hours are really worked out, because the software's version did not match how your setting actually offers funding.
Why funded hours are so fiddly to bill
The funding itself is not the hard part. The hard part is that a child's funded hours and their booked sessions are two different shapes, and the invoice has to reconcile them every month.
- Funding is usually counted in hours per week over a set number of weeks, but parents book sessions: mornings, afternoons, full days.
- Some families take funding term time only, others stretched across more weeks, and the monthly figure differs.
- Sessions are longer than the funded hours they contain, so part of each day is funded and part is paid.
- Entitlement changes with birthdays, eligibility reconfirmations and parents' circumstances, often mid month.
- Your own policy decides which hours the funding is applied to first, and that policy lives in someone's head.
When the rules are applied by a person each month, small differences creep in between one month and the next and between one family and another. Parents notice those differences before you do.
What getting it wrong costs a nursery
A wrong invoice is rarely a big sum, but it is a trust problem. Parents who feel they have been charged for funded hours start checking every invoice, and some raise it with the local authority rather than with you. Correcting invoices means credit notes, awkward conversations at pick-up and a manager who is off the floor doing admin.
Undercharging is quieter and just as real. Extra sessions that never reach the invoice, a funded child whose paid hours were rounded the wrong way, a stretched pattern applied to a family who only take term time: each one is income the setting has earned and not collected.
And because only one or two people understand the spreadsheet, the invoicing cannot happen when they are ill or on leave.
The billing build we put in place
- Each child has a funding record: the type of entitlement, the weekly hours, term time or stretched, the start date and the reconfirmation date if there is one.
- Your funding policy is written down once as rules: which sessions the funded hours are applied to, how part-funded sessions are split, and how rounding works.
- Bookings are read from your nursery management system, or from the booking sheet if that is where they live, including extras added during the month.
- The billing engine applies each child's funding to their booked sessions for the month and works out the paid remainder, line by line.
- Any child whose entitlement changes during the month is split correctly at the date of change, not averaged by hand.
- Draft invoices are shown to the manager with anything unusual flagged, such as a child with no funding record or a pattern that changed, before anything is sent.
- Approved invoices go to parents and to your accounting package, for example Xero or QuickBooks, so the books and the invoices agree.
| Situation | What the invoice shows |
|---|---|
| Full day, funding covers part of it | Funded hours and paid hours on separate lines |
| Stretched funding across the year | The same funded hours every month, as your policy spreads them |
| Term time only funding | Funded hours in term months, paid hours in holiday months |
| Birthday or eligibility change mid month | Old and new entitlement split at the date |
| Extra session booked during the month | Added as a paid line with the date |
We do not decide how your funding should be applied. Your setting's policy and the local authority's guidance do that. The system only applies what you have written down, the same way every month.
A normal month once it is running
Bookings change during the month as they always have. On the last few days, the manager opens the draft invoices, looks at the short list of flagged families, sorts those out, and approves the rest. The invoice parents receive shows their funded hours, their paid hours and their extras clearly, so there is less for them to query.
When a parent does ask, the answer is on screen: which sessions were booked, which hours the funding covered and why. When the manager is on holiday, the deputy can run the same process, because the rules are in the system and not in a spreadsheet only one person understands.
Does this sound like your nursery?
- Invoices are finalised in a spreadsheet, even though you have nursery software.
- Parents regularly query how their funded hours were applied.
- Only one person can do the monthly invoicing.
- Mid month birthdays and eligibility changes are handled by hand.
- You suspect some extra sessions never make it onto invoices.