5 Financial KPIs Every Childcare Center Should Track

What it tells you

How much of the capacity you already pay for — rooms, ratios, staff, rent — is actually generating tuition. It is the single biggest driver of a center's margin, because most of your cost is committed whether a seat is filled or not.

How to read it

Track it by room, not just center-wide. A center at 88% overall can still be losing money in one age group that is at 55% while another has a waitlist. Compare the trend across at least three months before reacting to a single dip.

What you need

• Licensed capacity per room
• Enrolled children per room (month-end count)

Illustrative example

Licensed capacity

80 children

Enrolled

68 children

Utilization

68 ÷ 80 × 100 = 85%

Illustrative figures only — not a benchmark or a client result.

What it tells you

What each enrolled child actually contributes, after the reality of part-time schedules, sibling discounts, subsidy rates, and unbilled or uncollected days. It is usually lower than your published rate, and the gap is where money quietly leaks.

How to read it

Compare it to your published weekly rate annualized. A large gap points to discounting, part-time mix, or billing that is not being enforced. Recalculate monthly; a falling value with flat enrollment is a pricing or collections problem, not an enrollment problem.

What you need

• Tuition and fee revenue for the period
• Average enrolled children for the same period

Illustrative example

Monthly tuition + fees

$61,200

Average enrolled

68 children

Revenue per child

$61,200 ÷ 68 = $900 per child per month

Illustrative figures only — not a benchmark or a client result.

What it tells you

How much of every tuition dollar goes to the people delivering care. In childcare this is the largest single expense line, and small scheduling changes move it more than almost anything else you can control.

How to read it

Include employer payroll taxes and benefits, not just gross wages — leaving them out understates the ratio by a meaningful amount. Watch it alongside utilization: a rising ratio with flat enrollment usually means overtime, over-scheduling to cover ratios, or float staff absorbing gaps.

What you need

• Gross wages for the period
• Employer payroll taxes
• Benefits and paid time off cost
• Total revenue for the same period

Illustrative example

Wages + taxes + benefits

$40,000

Total revenue

$61,200

Staff cost ratio

$40,000 ÷ $61,200 × 100 = 65.4%

Illustrative figures only — not a benchmark or a client result.

What it tells you

Whether the revenue on your books is turning into cash in your account. Enrollment can look strong while cash gets tighter every month, and this is the metric that exposes it early.

How to read it

Anything consistently under 100% means past-due balances are accumulating. Pair it with an aging list of who owes what and for how long. Separate private-pay from subsidy payments — they behave very differently and mixing them hides the real issue.

What you need

• Tuition billed for the period
• Tuition payments received for the same period
• Past-due balances by family (aging)

Illustrative example

Billed

$61,200

Collected

$57,500

Collection rate

$57,500 ÷ $61,200 × 100 = 94.0%

Illustrative figures only — not a benchmark or a client result.

What it tells you

How many months the center could keep operating at today's spending level if new cash stopped arriving. It converts your bank balance into a decision-ready number.

How to read it

Use an average of the last three months of operating expenses so one unusual month does not distort it. Exclude cash you do not control — deposits held, restricted grant funds, or amounts already committed. These are planning prompts, not benchmarks: many owners choose a personal comfort threshold and revisit new fixed commitments whenever runway falls below it. Set that threshold with your own advisor rather than adopting a general number.

What you need

• Cash on hand (unrestricted)
• Operating expenses for the last three months

Illustrative example

Unrestricted cash

$48,000

Average monthly operating expenses

$58,000

Runway

$48,000 ÷ $58,000 = 0.83 months

Illustrative figures only — not a benchmark or a client result.