Digitisation
Empowering decision makers: the impact of financial software
Tim Bryars, care home lead at cloud accounting software business iplicit, looks at how technology can help care home decision makers navigate financial challenges
The challenges that the care home sector has had to contend with in recent years have put a huge strain on many finance teams. After the trauma of the pandemic,
everyone in the industry deserved a respite. Instead, they have had to deal with the pressures of soaring costs, staff shortages, ever-increasing regulation, and constantly changing standards and inspection regimes. In many businesses, the finance team are unsung heroes. Theirs is often the Cinderella department, all but invisible on the frontline but vital to ensuring the business can go on delivering quality care. As the industry braces for its next wave of challenges, the people running the finances will be doing more important work than ever – but most will need better tools for their job. The government wants to see 80 per cent of CQC-registered homes adopting digital record systems by March 2024. But the digital transformation has to extend to finance. If leaders and their teams are left to contend with outdated technology, there is a real risk of undermining any efficiency gains made elsewhere – and of leaving hard- pressed staff under intolerable pressure.
The biggest challenge facing finance teams It is not news to anyone that costs in the care sector are escalating rapidly. That applies to staffing, utility bills, medical supplies, and just about every other area of the business. To keep their businesses profitable, finance leaders have to keep a close eye on costs. They need to identify where savings can be made and reallocate budgets as necessary in the interests of the service
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The digital transformation has to extend to finance
user. At the same time, they have to be wary of saddling their staff with an unsustainable volume of admin work.
Perhaps the biggest barrier to running a department efficiently is the complexity of most care home groups’ finances. Businesses commonly consist of multiple homes, set up as separate legal entities, each with their own accounting system, and often with their own procedures for invoicing and payment runs. Often, head office is a different entity again. One service user can be funded from
several sources, with billing split between the NHS, an insurer and relatives. The business also has to handle bills and payments that cover multiple residents, homes, and legal entities.
The upshot of all this is that despite long hours and hard work all round, a great deal
of information can exist in silos, invisible to the people trying to get a complete financial picture of the business.
The need to scale Amid all the challenges of running a care home business profitably, it has been necessary for more homes to consolidate into groups and enjoy economies of scale. This growth brings the challenge of uniting those incompatible finance systems to provide proper information.
But the industry is still struggling to grow
at the rate an ageing population will require. The number of people in England and Wales who are aged 65 or over grew from 9.2m in 2011 to 11m in 2021, rising from 16.4 per cent to 18.6 per cent of the population. More than half a million of those people were at least 90 years old. By 2041, people aged 65 and over are
expected to make up more than a quarter of the population. The number aged 85 and over is expected to stand at 3.2m, more
www.thecarehomeenvironment.com February 2024
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