Short answer
Build a redacted child-level schedule for at least the diligence period, then tie totals to the general ledger and bank. Enrollment is not one roster export, and licensed capacity is not paid occupancy.
Key Takeaways
- Match children across contracts, attendance, billing, and cash.
- Separate private-pay, subsidy, district, employer, and scholarship arrangements.
- Analyze full-time-equivalent schedules as well as headcount.
- Treat deposits, prepayments, receivables, and earned revenue distinctly.
- Protect child and family information through redaction and controlled access.
Longer answer
Request exports directly from the enrollment, attendance, and billing systems, with read-only access or supervised demonstrations when practical. Obtain change logs, rate tables, discount codes, credits, refunds, bad debt, and aged receivables. A static spreadsheet prepared for sale is less persuasive than a reproducible report tied to source systems.
Create a child-level identifier that omits names. For each identifier, capture classroom, birth month or approved age band, start date, authorized days and hours, payer, contracted rate, discounts, subsidy authorization, attendance, invoicing, cash, deposits, and notice status. Flag children whose attendance stopped, balance is delinquent, schedule is temporary, or notice was given.
CCDF recordkeeping rules illustrate why payment and attendance records matter in subsidized care, but state and local administrators control actual case requirements. Reconcile authorizations, family shares, attendance submissions, payment dates, credits, overpayments, and provider identifiers with the responsible agency.
What it depends on
| Test | Evidence | Risk found |
|---|---|---|
| Existence | Agreement plus recent attendance | Ghost or inactive enrollment |
| Rate | Contract, rate table, invoice | List price differs from realized rate |
| Collection | Bank deposit and payment ledger | Revenue is billed but not collected |
| Schedule | Authorized days/hours | Headcount overstates FTE use |
| Capacity | License, room ages, staff schedule | Seats cannot all operate |
| Retention | Starts, exits, notices, cohorts | Transition attrition |
| Waitlist | Dated inquiry, deposit, follow-up | Stale or duplicate demand |
Example
A seller reports 100 enrolled children against licensed capacity of 120. The buyer's redacted reconciliation finds 88 children with current agreements, attendance, invoices, and recent collections; six have given notice, four attend only two days weekly, and two accounts are materially delinquent. The correct conclusion is not “83% occupied.”
The buyer should model classroom-level contracted schedules, expected exits, staffed capacity, and collections. A separate verified waitlist might support future starts, but only if age, schedule, desired start, rate, contact recency, and conversion evidence align with available rooms.
What to do next
Agree on a privacy-safe request list and test period. Reconcile source exports, select samples back to contracts and cash, investigate exceptions, and repeat the analysis near closing. Put an enrollment and collections accuracy covenant, ordinary-course requirement, notice reporting, and permitted attrition test into the agreement with counsel.
Use the buyer hub, enrollment verification guide, waitlist diligence guide, software reporting guide, subsidy guide, diligence checklist, and enrollment valuation guide.
Frequently asked questions
Is a daycare roster enough to verify enrollment?
No. Reconcile each active child to a signed agreement, authorized schedule, recent attendance, billing, discounts, subsidy approval where applicable, deposits, receivables, and collected cash.
Should a buyer contact daycare families during diligence?
Not without seller authorization and a confidentiality plan. Start with redacted child-level records and aggregate testing. Any family confirmation should be legally reviewed, carefully timed, and narrowly controlled.
How should a buyer test a daycare waitlist?
Remove duplicates and stale inquiries, then verify desired age, schedule, start date, quoted rate, contact date, deposit, follow-up, and whether an actual space offer converted.
How is licensed capacity different from enrollment?
Licensed capacity is a regulatory ceiling under stated conditions. Enrollment is the children contracted for care; attendance, staffed capacity, room and age limits, schedules, and collections determine usable economics.
Sources
Related
Enrollment verification should feed valuation, working capital, staffing, and the closing bring-down rather than exist as a one-time report. Retest material changes carefully and independently immediately before closing.