How much cash should a daycare keep?

A private-pay daycare collects tuition weekly or monthly, usually in advance. That is good for cash. The pressure comes from staff. Ratios set how many teachers each room needs, so payroll is large and hard to cut when enrollment dips.

Payroll per run, all-in $ How often you run payroll Fixed bills per month (rent, loans, insurance, software) $ Days your customers take to pay, on average days Cash in the bank today $

Minimum to keep

Two payroll runs plus one month of fixed bills

Comfortable level

Covers costs while you wait for customers to pay, plus one month

Weeks your cash covers

If no customer paid you

The starting numbers are an example. Replace them with yours.

How cash moves in a daycare

Tuition paid in advance gives a daycare cash before the care is given.
Teacher ratios fix payroll by room.
An empty spot in a full room costs the same staff as a filled one.
State subsidy payments, where you take them, arrive slower than private tuition.

Why the usual rule falls short

Two daycares each enroll 80 children. One collects all tuition privately in advance. The other gets a third of its revenue from state subsidies paid a month late. The second carries a month of that revenue on its own payroll.

How the calculator works

Result	Formula
Minimum to keep	2 × payroll per run + 1 month of fixed bills
Comfortable level	Monthly costs × (days to collect ÷ 30 + 1)
Weeks your cash covers	Cash ÷ weekly costs

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Also for daycare owners, see the daycare monthly financial report.