Managing profitability of your nursery

The current climate is becoming increasingly challenging for private nurseries, with shortfalls in local authority funding of child places, higher business rates and higher staff costs. We understand that in many instances the funding provided by local authorities for child places is insufficient to cover costs and that this issue may get worse with Government plans to extend the funded hours per child from 600 to 1140 hours a year.

Business rates changed recently impacting on costs. This year the rateable value (RV) of properties was reassessed, pushing many nurseries into higher business rates thresholds. In addition, staff costs tend to be the biggest expense for nurseries, the increase in the National Living wage has therefore impacted greatly on costs. This has made some owners re-consider the structure of their staffing with some considering employing a higher ratio of younger staff to reduce the financial strain.

With these growing financial burdens, what can nurseries do to reduce costs and increase profitability? Here at EQ, we can offer you the following solutions, tailored to meet your needs:

• Management accounts – we can produce monthly/quarterly accounts to enable you to see clearly how the business is performing and highlight key cost areas that need to be addressed.

• Bookkeeping & payroll services – we provide excellent bookkeeping and payroll services at competitive rates, ensuring all your records are up-to-date.

• Cloud accounting – we are experts in using Cloud accounting packages. These are online bookkeeping packages, “stored on the cloud”. These can provide savings on bookkeeping, as they tend to have lower subscription costs compared to other computer packages, and combined with automated functions, such as direct input of bank statements, save time too.

• Benchmarking – with our significant portfolio of nursery clients we are able to carry-out essential benchmarking services to ascertain how well your business if operating and offer helpful advice.

• Tax services – with our specialised tax team we can provide excellent personal, partnership and corporate tax services.

• Auto enrolment – employers are now obliged to offer workplace pensions. Your business will have a designated staging date by which auto-enrolment is to be in place. We can assist with the compliance process and with the monthly administration through our payroll services.

If you would like to find out more detail on how we can assist your nursery business, please contact our dedicated team, Gail Cowan on 01592 630055 or Joanna Smith on 01382 312100, alternatively by email Gail.Cowan@eqaccountants.co.uk or Joanna.Smith@eqaccountants.co.uk.