By Warwick Haycock, accounting software specialist at The Access Group
The greatest expense for home care agencies is usually staffing costs. It is typically one of the most complicated expenses to manage too, with zero-hour contracts leading to ever-changing shift patterns and high staff turnover in health and social care.
According to a report commissioned by The Health Foundation in 2019, the biggest challenge for the sector, especially England, is staffing. And in 2018/2019, Skills for Care estimated that approximately 440,000 directly employed social care staff in England left their jobs, amounting to a turnover rate of 32.2%. It’s a significant issue affecting all home care businesses.
The Covid-19 pandemic has put even further pressure on those working in the health and social care industry, exacerbating staff shortages due to illness or employees needing to self isolate. This has added increased pressure on finance teams managing staffing costs, as it has only complicated the process further.
While it has always been the finance team’s responsibility to balance the books and cut costs where necessary, it has become even more prevalent during this period of global crisis as businesses work to fuel growth.
Managing cash flow is one of the most important tasks of running a home health care agency, but it can be tricky to monitor because these companies traditionally bill in arrears.
While it might sound a more convenient way of invoicing, billing after shifts and assignments are complete means home care agencies often find that they lack sufficient cash flow because of having to pay for suppliers and salaried employees before getting paid themselves.
With ongoing economic hardship, and finance teams already bogged down by endless manual tasks, automating cash flow management could save them valuable time. An automated solution will allow them to set up automated transaction postings, invoice reminders and debt write-off routines.
As the whole business learns to work more efficiently, your organisation can drive its combined efforts towards caring for the wellbeing its patients.
With one collaborative centralised dashboard, finance teams – and also non-finance staff – will have full visibility of the company’s payroll management system. The dashboard can help to provide the finance team with a clear breakdown of fluctuating staff levels, any vulnerable employees (those in high-risk groups) and absence management.
HR teams will also benefit from accessing this dashboard, with much of their day-to-day roles focusing on monitoring staff changes for onboarding or return-to-work purposes.
Particularly now in this time of business recovery, record-keeping is of vital importance and maintaining an accurate and complete record of staff comings and goings is crucial in order to seamlessly deliver the weekly/monthly payroll process, as well as keeping clients safe.
An automated system however, will provide real-time updates on the cost of employment across the board, from the cost of sickness absence, to highlighting why or when employees tend to vacate their roles. This automated data could help to inform future onboarding or retention strategies, with the aim of saving the company money in the long-run and possibly even providing a better level of care.
Treasure trove of data
Making payments in full and to terms is a crucial process in maintaining a healthy cash flow, but manual processes – when there are a number of moving parts – can take up valuable time that finance leaders don’t have.
An automated solution, however, will allow your finance teams to control exactly where the agency’s money is going and identify where the company may be overspending. Often, too much time and money is spent on manually-intensive tasks – from updating supplier details and chasing invoices, to allocating rotas or working out the cost-per-service to controlling staffing costs and ensuring you are complying with your minimum staffing levels.
In the long-run, these manual tasks could be a big drain on the company’s resources, as well as taking finance teams away from more strategic, value-adding tasks.
By having access to real-time data through one centralised dashboard, finance teams can easily keep track of spend; including outstanding invoices, outgoings and projected cash flow for the coming months so as to avoid any unexpected surprises that might leave them out of pocket.
The data may even help your finance teams to identify both where the business could cut costs or areas where deeper investment could be applied. Finance teams often sit on a treasure trove of data that could be useful when applied to the overall businesses’ aims or strategies, so it’s important that they have the tools at their disposal to unearth insights from this data on a regular basis.
If this pandemic has demonstrated anything, it is the importance of ensuring your finances remain on track in order to ensure your hard-working staff get paid on time, as well as preserving business security. Home care firms should be embracing automation in order to prepare themselves against surprise staffing costs, and using this period as a catalyst to make the transition.
For more information on The Access Group’s financial management system, and how it can help your business preserve its cash flow, click here.