For Care Home Service Providers
For Care Home Service Providers
As our population ages, the care home service sector is expected to expand in the coming years, and your care home business must be ready for the difficulties and possibilities that will arise. There is a lot to consider regardless of the type of care business you run: Care Quality Commission inspections, staffing, rules, maintenance, health and safety, bookkeeping— the list goes on. Bookkeeping for a home care firm is one of the most time-consuming and complex tasks in a company.
Staff will spend most of their time tracking down papers, assembling or arranging paper, and manually entering data into accounting systems if you work with a paper-based accounting department where every document that comes in requires some human processing. At this rate, processing agency billing or payroll could take hours, and audits will appear more painful and time-consuming.
Organizations should think about the advantages of implementing an integrated system. Data may flow effortlessly through your agency using a secure, cloud-based home healthcare software platform with an integrated accounting system, resulting in a more structured business. This can significantly decrease accounting challenges and turn audits into a systematic source of operational insights rather than a nightmare.
Here are some of the extra benefits you may expect from using an integrated home healthcare accounting solution:
Documents are easily accessible from any location, at any time.
If you keep your accounting records on paper, you may spend hours looking for the correct files to pull. Your staff can find and open documents in seconds with an integrated cloud-based accounting solution, regardless of the device they're using (phone, tablet, desktop, laptop). Information is readily available, allowing processes such as billing and payroll to be completed quickly and efficiently, with manual chores being replaced by a single click of a button.
There are two types of accounting procedures to choose from accrual and cash-based accounting. Each technique will determine how you handle your money and will be tracked uniquely. The most frequent accounting system, especially for home care agencies, is cash basis accounting. It's straightforward and straightforward to follow – for the most part. Cash basis accounting records money as it comes in and expenses as it goes out. The cash flow is displayed in real-time, with cash in and out highlighted as it occurs.
You'll need a few essential documents to keep track of your finances. A balance sheet, income statements, and cash flow statements are examples of these.
Balance sheet: A balance sheet can provide you with a good picture of your business. It keeps better track of assets, liabilities, and owner equity.
An income statement is a financial statement that illustrates a company's revenue and expenses over time. It's crucial to your business, especially as you examine your home care agency's profitability more closely.
A cash flow statement is self-explanatory; it offers an overview of where your money is going. It demonstrates how cash helps or hinders business.
Best-in-class care homes have a net income after tax of 40%- 45%, where the bottom of the list has an average of 20% net income. We consistently work with our clients to ensure they always stay on the top of the list, and currently, all of our care home companies will have net income after tax of 38% - 45%.
As we've already stated, the most crucial thing to remember about home care agency finances is that you should be recording everything. Yes, we mean everything when we say "everything." It's simple to overlook, yet it has significance in other aspects of your business.