CPE

Do you get the most out of your auditor? My professional experience has shown me that very few customers benefit the best out of their auditor, and this is often because they have no idea of what their auditor could do to help them.

A necessary evil

Certain CPE managers have the impression that an auditor is a necessary evil. “We look for the cheapest…..who will sign our report and say goodbye until next year”. I’ve heard this sentence being spoken several times. For such people, the auditor brings in no added value, and it’s simply an obligation of the ministry….it could be even said that for them, it’s no more than a mere waste of money. This is certainly unfortunate; I would venture to say that this has actually become the majority line of thought among the network. People don’t say it so loudly, but behind the surface, one would often end up saying it.

Nevertheless, the chartered professional accountants’ auditors are certification experts and intuitive business consultants. As a result of their extensive training and specialist experience, the chartered professional accountants have developed a comprehensive vision on the various operations within the organization. Thanks to their unique expertise, they are competent enough to offer productive solutions to all the issues confronted by organizations so as to improve their performance.

So, why do some consider it be no more than a necessary evil?

Perhaps, auditors are somewhat at fault for this. One had already told me that you should not do more than what the customer requests. “The customer wants to speed things up in the lowest possible cost and if they could break free from us, they would then be even more satisfied, and thus, this is what must be given to them, nothing more nothing less.”

Now, you might think that I am an idealist, but I am not capable of being reduced to the minimum. Personally, the real pleasure in this job is in post auditing consultancy. This is the part where I could see the twinkles in the client’s eyes along with a faint smile of satisfaction. This is my addiction, I need to see the twinkle and the smile of satisfaction and I can’t do without it.

Apparently, there is a question of cost

This is unavoidable. The more time spent with the customer, the more will the cost be. But how much more expensive? Long years of experience have proved to me that it’s approximately $2000 on average to serve as a business consultant to the customer.

The important question is: is it all worth it?

I know that it’s certainly worth it, but of course I must demonstrate to you how. The first proof is the number of customers who confide in us. Many child care services show their confidence in us every year and like you, they receive submissions every year as well. This regularity can only be explained by the numerous benefits the customers gain each and every year and definitely not through lower prices. Our customers are not fools, they are also aware of how to shop and they have been with us for years. Our greatest promise; perfectly clear explanations. This might seem very simple, but it makes all the difference when rules at times unwritten, become complicated, and they always tend to change regularly. I am referring to the budgetary rules of the Ministère de la Famille, the childcare act, the regulations act, the consumer protection act, the labour standards, the CSST, the educational program, the taxes and so the list goes on.

I want to see it to believe it!

You are a Tomas!!! Perfect, me too, it’s my job. Must practically live it to believe it. For Tomases like me, the firm offers a free consultation worth $375 so that you’ll have the opportunity to experience an overview of these specialized advices.

During this free consultation, we will carefully analyze your situation with you, in order to:

• Make sure that you maximize your subsidies since day care centers and CPEs often tend to lose thousands of dollars of subsidies by mistake.

• Compare your figures with those of other centers. Comparisons strengthened with supporting evidence. Your figures will be compared against all forty office client childcare services on almost every line of financial statements. Will you be among the top few or at the back of the line? 

• Make sure that your internal processes are effective, efficient and adequate at all circumstances. This is quite critical…. you probably can’t imagine to what extent your processes can be held responsible for most of your unintended additional costs. Is that your case?

• Analyze variances in the budget

• Your working capital ratios

• The amount of your real savings

• Know in advance the exact amount that the ministry will either withdraw or return to you based on your financial statement.

Usually, an auditor with sufficient experience on child care centers (at least about twenty day care centers and CPE customers) should be capable of providing you these additional services for an affordable rate if he had not already done so.

Should you have any questions, feel free to contact us right now to discuss with a partner on the peculiarities of your case and book an appointment for a free consultation. And make sure to ask for more information on our competitive rates and our exclusive promotions.

See you soon,

The Célestin CPA Team

The management business of a day care center in Quebec is not as simple as it appears to be. In fact, you only have to consider a number of rules that must be taken into account such as the childcare act, the regulations act, the budgetary rules, the labour standards, the consumer protection act, the pay equity act, the food safety law and many more. In this bulletin, I will try to discuss what the professional management of a day care center means.

How is it that some clients of the office succeed in achieving a profit of $300 000 (with a little less than 70 places and charging no more than $7) whereas others only stop at $100 000 with 80 places? What we can conclude is that this is simply not about maximizing occupancy or having a tight control on expenditure. Only a professional management of the day care center can make all the difference. Don’t forget that a slight difference in the annual profit can make a huge difference in the ultimate selling price of the day care center, when the day comes.

Perform! For some, the invocation of the performance concept alone has a negative connotation. The culture of CPEs (non -profit organizations – NPO) very often urges administrators against the idea of performance. When I talk about performance, I am often left with the answer” We are not ready to make profits… at the expense of children” or” that’s not our objective”. In fact, many would certainly agree to the fact that one must always try and improve. Such is the concept of performance. It means to improve continuously in terms of oneself. Septics are generally confused when I contrast that the CPE children could gain much more if the CPE tried to improve its performance.

There are several management approaches, but my practice had confronted me with three main types of approaches. They are the “expenditure control” approach, the “satisfaction” approach, and the “professional” approach. I incorporate these approaches in day care centers as much as in Early Childhood Centers (CPE). Each manager has his own choice in selecting the right approach. Usually, most managers with a high level of experience opt for the “satisfaction” approach. While some are likely to adopt a mixed approach or a professional approach. 

The “expenditure control” approach

Advocates of this approach requires the organization to adapt a tight control on the expenses. Generally, the less experienced managers are most likely to implement this approach. In fact, it is much easier to exercise on this approach when compared with the others. The manager need not be talented, nor have an in-depth awareness on all the rules, all he has to say is no more or less, each time he has to take out money, that’s it. In these day care centers, wasting is not allowed and everything is cut wherever possible. The plates of the children are monitored, heating is reduced a little (supposedly in order to protect the environment) and these managers cut on educators if there are too many absentees on one morning. But the worst is when the most audacious, cut down the corners and take “calculated” risks on the safety of the children.

The strictest can eventually end up creating significant conflicts within the organization at every level while deteriorating, over time, the achievements that the day care center could have. Such an approach would pave the way for many to be dissatisfied and thus may even lead to the rise of a labor union. These managers pointlessly create conflicts with employees who will ultimately undermine their own satisfaction against their company. This approach, more or less basically valid, can also be transformed into a negative attitude which will contribute to an increased number of complaints from parents, which, in turn , will create an occupation much more difficult to maximize, and will provide opportunities for many inspections from the Ministère de la Famille (MFA). Finally, these managers will only increase their “burnout” chances and when the day come comes, the owners, a little tired, will accept a lower price for their day care centers.

The “satisfaction” approach  

For those employing this approach, maximizing the satisfaction of everyone would be their principal objective. They tend to have a well-balanced approach where the control of expenses allows a maximum potential for flexibility. These managers are particularly concerned in making sure that everything is as scheduled and that there is a least possible dissatisfaction within their establishment. Results indicate that these managers do not necessarily gain fewer profits than those who support the “expenditure control” approach.

In fact, an overall satisfaction usually results in less pressure on salaries than a highly controlled day care center.  The CSST rate is often lower; there are less legal fees, lower rotation of educators and a better modulation factor. These differences are therefore gained as one goes along. The manager who looks for a short-term profit is more likely to opt for the expenditure control. Although, over a longer period, the manager who administers “satisfaction”, will find himself winning, not only because he is less likely to be “burnout” but because the profits he gains for his day care center will not necessarily be any worse.

The “professional” approach

The professional approach is characterized by achieving the best balance enabling to reach the highest profit. One of their most powerful characteristics, whether trained or not, is that they reconsider their day care centers repeatedly. Professional managers work to raise profits from the day care center while also respecting the sensitivities of everyone. They will clearly identify what the potential risks are and will take effective and efficient measures to keep them under control.

These professionals take their role very seriously. Their decisions are not taken lightly and they are consistent with the objectives fixed at the beginning of the year.

A professional manager knows how to read the figures of his annual financial report (AFR) and would have a fine knowledge on the budgetary rules of the MFA. There is nothing magical, simply that figures show them what choices are to be made. The AFR, prescribed by the MFA, has been well designed by the departmental officials. The AFR has been carefully analyzed in order to develop a productive evaluation tool. The ministry uses the AFR not only to make sure to pay or to resume the final grant, but also to develop statistics and carry out various analyses. You should also see it more closely.

Analyze its results and set goals

A rigorous analysis on the results of the day care center must be essentially carried out at least once a year. With the help of this analysis, you should be capable of identifying your strengths and weaknesses and thus; you may prepare goals for the next year for both you and your staff. Very often, those responsible for running a day care center lacks in sufficient management training. In fact, it is highly important for a manager to understand at least the basics of accounting and the tax system and their responsibilities as manager.

But what should a professional manager do at first? 

In order to be successful in professional management, the person responsible must first stop taking his management work slightly. Many responsibilities fall under the manager of a day care center. Not only should he ensure a maximum profitability from his establishment, but he should also be capable of managing the daily risks. The risk of prosecution is relatively high within day care centers and CPEs. I have noticed regular prosecutions from parents, educators and even from directors. In addition to this, the risk of bad publicity is an issue that must be very often dealt with, in case an educator makes a mistake with a child.

If you have already chosen the “satisfaction” approach, know that the professional approach is within your reach. And if you are of the type “expenditure control”, you still have a long way to go, but I believe that you may certainly achieve it.

You will also need the support of a specialized consultant who would be fully aware on the field of day care centers and CPEs. Alone, chances are that you may never achieve it. The chosen consultant must focus his expertise in this domain. Certain chartered professional accountants firms such as ours (Célestin Chartered Professional Accountants) have already expanded a vast clientele in the field of day care centers and CPEs that had enabled them to handle various problems constantly experienced by day care centers and CPEs. The procured experience from all these problems is far from being insignificant.

In fact, the accumulation of success and solving errors encountered by office clients over the years, has equipped us with an experience that can turn out to be a small gold mine for you.

See you soon,

Célestin Chartered Professional Accountants