End of Term, Start of Planning: What Nursery Managers Should Review

Posted on 22nd June 2026

Being busy and being profitable are not the same thing. As we reach the midpoint of 2026, now is the moment to pause and actually look at the numbers.

Carve out time now to review the financial health of your nursery

The last few weeks of term are rarely quiet. There are leavers to celebrate, room transitions to manage, parent conversations to navigate and somewhere in the middle of all of it, a pile of admin that's been quietly growing since Easter. If you're a nursery manager reading this while mentally ticking off a hundred different things, this one's for you.

Summer is coming and with it a natural pause in the rhythm of your setting. Before the busyness gives way to the slower pace of the school holidays, it's worth carving out some time to review the financial health of your nursery. Not because it's exciting, but because the decisions you make now, or put off making, will shape how smoothly September looks.

Here's your practical childcare business finances checklist to work through before you break up.

1. Get Honest About Your Summer Cash Flow

Cash flow is the lifeblood of any small business and in the nursery sector it comes with a very particular seasonal pattern. Summer typically brings reduced headcount, fewer funded hours being claimed, and in some cases, families who pause their places entirely during the holidays. If your income drops in July and August but your fixed costs such as rent, salaries, insurance etc. don't, you can find yourself in a tight spot by September.

Now is the time to map out what's coming in and what's going out across those two months. Look at your confirmed bookings, your expected government funding payments, and your bank balance. If there's a shortfall on the horizon, you're better off knowing now and planning for it than discovering it mid-August. A simple cash flow forecast, just a month-by-month summary of income and outgoings, can give you the visibility you need to make good decisions.

One nursery manager we work with did exactly this last June and discovered that eight families had confirmed they were pausing their places over summer, which was more than the previous year. Mapped against her fixed costs, that created a £6,000 gap across July and August. Because she spotted it in June, she had time to negotiate a short-term payment holiday on a piece of equipment finance and adjust her bank balance expectations accordingly. It wasn't a crisis, it was a conversation she was able to have calmly in advance.

2. Review Your Staff Costs and Holiday Entitlement

The early years sector employs over 330,000 people in England alone and staffing is almost always the biggest cost for any nursery. Summer is also the time when holiday entitlement tends to pile up, and if you haven't been tracking it carefully throughout the year, you may be heading into a period where multiple team members are off at once or where you owe holiday pay you hadn't budgeted for.

This is a good moment to pull your payroll records and check where everyone stands. Are any staff carrying over leave that should have been taken? Are you clear on entitlements for part-time team members, which can trip up even experienced managers? If you offer any additional perks as part of your employment packages, now is also the time to review whether they're being accounted for correctly our article on accounting for employee benefits is a useful starting point if you want to make sure everything is in order.

3. Check Your HMRC Deadlines

It sounds obvious, but in the day-to-day reality of running a nursery, HMRC deadlines can creep up quietly. If your nursery operates as a limited company, your corporation tax payment deadline is nine months and one day after your accounting year end which for many settings falls at a point that requires action over the summer. P60s should have been issued to all employees by 31 May.

If you're a nursery owner drawing a salary and dividends, your self-assessment tax return for the 2025/26 tax year is due by 31 January 2027 but getting your records together well in advance makes the process far less stressful, and could save you money.

This is also a good time to think about whether your pension arrangements are as tax-efficient as they could be. Many nursery owners don't realise how much scope there is to reduce their tax bill through the right pension structure. You can read more about that here tax-efficient pension contributions for company directors explains the main options clearly.

4. Revisit Your Fees Ahead of September

September is the natural reset point in the nursery calendar. New starters, room moves, and often, updated fee structures. If you haven't reviewed your fees since last year, now is the time. Nursery fees across the UK have risen significantly in recent years as providers absorb higher staff wages, increased utility costs and the ongoing pressure of delivering government-funded hours at rates that don't always cover the true cost of care.

The question to ask yourself is simple: do your current fees reflect what it actually costs to run your setting? Many nursery managers are undercharging, particularly for wraparound sessions and holiday care. A fee review doesn't have to mean a dramatic overnight increase, but it does need to be considered and communicated to families with enough notice which means starting that conversation now, not in late August.

The same manager had a similar realisation about her morning wraparound session, which hadn't been repriced in two years despite her wage bill rising three times in that period. After reviewing her numbers, she increased the rate by £1.50 per session which was modest enough that no families left but enough to recover around £9,000 in additional annual income. She told us the hardest part was deciding to do it. Once the letter went out, the response was far calmer than she'd anticipated.

5. Reconcile Your Government Funding

If your nursery offers the 15 or 30 hours of government-funded childcare, you'll know that the funding process involves local authority claims, headcount snapshots, and reconciliation periods that don't always run smoothly. Before the summer term ends, check that your funded hours claims are accurate and that any adjustments or clawbacks from previous terms have been properly recorded in your accounts.

Errors in funded hours reconciliation are more common than many managers realise, and they can have a material impact on your income. If you're not confident that your records match what the local authority holds, it's worth investigating now rather than waiting for a surprise in your next payment.

Give Your Finances the Same Attention You Give Everything Else

There are around 54,000 registered childcare providers in England and every one of them is navigating the same pressures. Each is facing rising costs, workforce challenges, funding complexity, and the relentless pace of the job. The ones who tend to weather it best are those who make time, even briefly, to look at the numbers with clear eyes.

If you'd like support with any of the areas above, from cash flow planning to payroll compliance to making sense of your funded hours, the team at Profectus Accounting works with nurseries and childcare businesses to take the financial complexity off your plate. Sometimes it just helps to have someone in your corner who understands how the sector works.

Enjoy the end of term. The planning can start now.