Budget season in April
Your accountant asks for next year's budget. The biggest questions are how full the nursery will be from September, what that means for income, and how many staff you will need. You know the pre-school leavers are going to school. You know roughly which toddlers will move up to pre-school, and which babies will move to the toddler room. You know some will gain funded hours on their birthdays.
Working it through takes an evening with a printed list of every child, a highlighter and a calculator. The result is a single income figure for the year and a guess at staffing. By June, three families have given notice, two have changed days and the figures are out of date, but nobody has time to redo them.
Why nursery forecasting is harder than it looks
- Every child moves through rooms by age, each on their own date.
- Funding entitlement changes with birthdays and parents' circumstances, which changes the split between funded and paid hours.
- The September intake to school removes a whole cohort from pre-school at once.
- Starters from the waiting list are likely but not certain.
- Staffing needs follow numbers and ages by room, under the ratio rules your setting applies.
Each of these is predictable from information you already hold. The difficulty is doing them all together, month by month, for every child.
What a rough forecast costs
Budgets built on a single guess lead to surprises: a room that needs another practitioner earlier than planned, or a drop in income in the autumn that nobody saw coming. Recruitment is left late because the need was not visible in spring. Conversations with the bank or with a buyer, if you are ever selling, are harder without a forecast you can explain.
It also costs you options. If you can see in March that the toddler room will be light from October, you have time to market it. In September it is too late.
The forecast we build
- Every current child is read from your nursery management system with their date of birth, sessions, funding and any leaving date.
- Room moves are projected using your age rules and the date each child will be eligible to move, adjusted by the manager where a child is staying on.
- School leavers are removed at the date you set for the end of their final term.
- Funding changes on birthdays are applied under the funding rules you enter, splitting hours into funded and paid.
- Confirmed starters are added, and waiting list families can be included at a likelihood you choose.
- The forecast shows, month by month and room by room, the number of children per session, expected parent fees, expected funding income and the staff hours your ratio settings suggest.
- It updates as bookings change, so the June picture reflects the families who gave notice in May.
| Forecast line | Built from |
|---|---|
| Children per room and session | Current bookings, room moves, leavers, starters |
| Parent fee income | Paid hours at your prices, after funding |
| Funding income | Funded hours under your entered rules |
| Staff hours needed | Numbers and ages by room against your ratio settings |
The forecast is a planning tool, not financial advice. Your accountant uses it with you to set the budget.
Budget meetings, afterwards
In April you open the forecast. Pre-school drops in September as expected, toddlers fill it again by November, and the baby room is full all year with families waiting. Parent fee income dips in the autumn term while funding income rises as children turn three. You can see you need another practitioner in pre-school from November, so you start recruiting in the summer.
Your accountant gets a monthly figure rather than a single number, and it updates when things change, so the budget stays useful through the year.
Signs your forecast needs work
- Next year's numbers are worked out by hand from a printed list.
- The forecast is not updated after families change or leave.
- Autumn income surprises you.
- Recruitment starts after the need is already there.
- You cannot easily show the bank how numbers will change.