Contracts & The Funding Tracker

Setting Up Contracts & The Funding Tracker

Managing the financial bridge between parent fees and Local Authority funding is the most complex part of running your childminding business. KinderStart's Contract & Funding Engine handles this "three-way" reconciliation (Parent, Council, and HMRC) automatically, ensuring you never lose a penny to rounding errors or funding clawbacks.

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CONTRACT: The contract generation workflow

Step 1: Generating a Professional Contract

A contract in KinderStart is more than just a price; it's the "Brain" that drives your invoicing and register.

1. Select a Template: Choose from Standard, Term-Time Only, or Ad-Hoc.
2. Define the Schedule: Set the child's regular hours. KinderStart supports Fixed, Alternating Weeks, and Stretched Funding patterns.
3. Review Clauses: Toggle optional clauses for late fees, deposit requirements, and notice periods.
4. Digitally Sign: Once generated, KinderStart sends the contract to the parent's portal for a secure, timestamped digital signature.

Step 2: Navigating the 2026 Itemisation Mandate

From January 2026, UK childminders must provide transparently itemised invoices for all funded places.

• The £0.00 Rule: KinderStart shows funded hours at £0.00 on the parent's invoice automatically.
• Itemised Consumables: Add charges for meals, nappies, and outings as separate line items.
• Full Transparency: KinderStart's "Invoice Audit" tool shows the parent exactly how their final balance was reached, reducing payment disputes.

Step 3: The Funding Tracker (Avoiding the Clawback)

Track all contracts and funding information in one place — your most reliable defence against Local Authority clawbacks. Statutory guidance funds the hours planned on the parental declaration, not minute-by-minute attendance — so KinderStart tracks "used" and "banked" hours the way your LA expects:

1. Absences & early collections count as used: If a child is absent, arrives late, or is collected early, those funded hours are recorded as used — you are not penalised, and no liability to provide free care later builds up. The tracker still logs each short session so you can spot a routine pattern and formally reduce the declared hours if needed.
2. Genuine Banked Hours: Hours bank automatically only when the parent missed out through no day-to-day choice of their own — you close due to illness, a bank holiday closure your LA still pays for, or a stretched contract capped below its fractional entitlement (e.g. 23.75 hrs/week offered as a flat 23).
3. Offer Back: Spend a child's banked balance by recording a free ad-hoc session — the recognised LA process for clearing the balance without financial loss, logged in your funding ledger for compliance.
4. Clawback Protection: When it's time for your termly headcount, use the Funding Report to provide 100% accurate data to your Local Authority.