Digitisation
than double the figure from 2016. As that statistic reminds us, the need for care home businesses to be not just financially viable but also scalable will increase. And that scalability will be difficult to achieve without a great increase in efficiency.
More financial and accounting challenges Instead of being able to focus on those big picture issues, care home finance heads are often consumed with just trying to make their system work.
Businesses will often be using several different finance packages on different sites – or separate instances of the same software. Each system might also have different links to third party applications. Separate homes in a group may be running their own invoicing systems and paying supplier invoices. Meanwhile, the central finance team has the task of untangling all the charges that are due in respect of any individual service user. It may be that the person’s care has to be billed partly to the NHS and partly to an insurer, while relatives may have agreed to contribute to other services, from pay TV to physiotherapy.
At the same time, the finance team will
need to allocate incoming invoices to the correct entities in the group. Often, those invoices will be for services that have been spread unevenly across different parts of the business. It is not uncommon for a single invoice to require adjustments to a dozen journals.
Some funding – from insurance claims,
for example – has to be carefully monitored to ensure it is used only for the intended purposes, adding another layer of manual work.
On top of all this, there may well be manual processes in place for paying expenses and authorising local spending, as well as time-consuming bank reconciliation processes. The risk of human error, and of items going missing, is huge. When it comes to month-end, there will be a large amount of manual work to be done to consolidate the accounts. Commonly, one member of the team will spend a lot of their time working in spreadsheets to produce any meaningful management information, and even then, the data will be out of date. With every day processes and month- end taking so long, it is not surprising that audit can become an event to dread, adding further work and pressure to overstretched teams.
The need to embrace technology The care sector has not always been quick to embrace the potential of digital technology. That is understandable in an industry where margins are tight and frontline care must be the number one priority. But digital transformation is coming to
the sector. The government’s target for 80 per cent of all registered care providers to adopt a digital care records programme is intended to be a milestone on a journey to better integrating health and care services. It should allow real time information to be shared between authorised users in both sectors.
No such government edict applies to the accounting system, but care home groups will be missing an opportunity if they leave finance out of a digital transformation. Worse, they could find the potential for
better and more efficient service delivery is undermined by a finance system which lags far behind the standards expected of care records. That could cancel out many of the benefits of digital transformation – as well as leaving finance staff exasperated as their needs are sidelined.
The benefits of cloud accounting The benefits of moving to cloud accounting software start with drastic time savings and improvements to accuracy. Automation takes away much of the low-
level admin work that has been the bane of many staff’s lives. In the business I work for, we have seen examples where automated bank feeds have saved users seven hours a week – or where half a day’s bank reconciliation work has been telescoped into five minutes. In one case, an invoicing process that once took three days can now be done in half an hour. With the right software, there is no more logging in and out of different finance systems to process transactions or gather information. Instead, one login allows a user with the correct permissions into every part of the finance operation. Consolidation features allow an incoming payment to be correctly allocated across multiple accounts and legal entities. The same applies to batch payments across multiple supplier accounts from several entities.
In the case of service users funded from
several sources, the best systems can give each resident a unique identifier to track those funds. Money restricted to particular uses is easily monitored and reported on. Any need to store physical records can
February 2024
www.thecarehomeenvironment.com
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