Your finance team plays a key role in the functioning of your care organisation; controlling costs, chasing aged debt and managing payroll being just some of the vital tasks they undertake to help keep your service ticking over. But of course, managing spend is another complex process we can add to this list.
And as part of our Care Trends Report 2024, 42% of care leaders told us they are considering adopting cloud finance software into their organisation as they work to digitise their processes.
So, in this article, we’re looking at the sorts of challenges social care organisations may face when managing their spend, and some key benefits cloud finance software brings so you can get more control over your financial processes.
What are the challenges when controlling spend in social care?
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Changing needs
No two days in social care are the same. So, understandably, it can be incredibly difficult to predict what your service will need and budget for it. For instance, your clients likely have a wide range of different care requirements, your staffing or occupancy levels may fluctuate. All this can make it hard to plan what your organisation’s spend will look like and then adapt when things ultimately change.
And as our population grows and ages, those requiring care will likely have more complex needs. So perhaps you’re wanting to branch out your care offering to provide different support, expand to new locations, invest in additional equipment or specialist training for your teams. But this will of course need financial planning and budgeting to prepare for.
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Meeting demand
A record 2 million requests for adult social care were made in 2022/23. However, the staff turnover rate in the sector remains high at 28.3%. So, while demand for care increases, many care providers are likely finding it harder to allocate resources in order to meet it.
And according to Care England's Sector Pulse Check 2023, 54% of care providers have increased their agency use due to staffing shortages. Considering and adapting your plans to address retention issues, all while staying within your budget limits, is likely going to be an ongoing challenge in many care organisations as demand and cost for care continues to rise.
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Manual processes
42% of CFOs told us their service heavily utilise spreadsheets to manage financial information. And when you’re relying on manual processes to manage spend, human error, duplication or missing receipts can mean your team spends even more time and effort managing your organisation’s finances. Spreadsheets are also hindered by the fact that they do not provide data in real time so are out-of-date from the moment the file is created.
Plus, when you’re working from low quality data you may not be able to accurately see just how your organisation is managing spend, such as where your priority areas are or what you may need to budget for going forward.
3 key strategies for controlling spend in social care
1. Put an end to maverick spend
One way you can get more control of your outgoings is to manage maverick spend. As you will know, maverick spend refers to any unauthorised payments someone may make, such as for travel arrangements or stationary top ups.
And when these expenses aren’t carefully monitored, unapproved spend can go unnoticed or it could be that the products or services they are paying for aren’t to the quality you’ve come to expect from your registered suppliers. For instance, you may have specific requirements for your suppliers to have a sustainability initiative, so it’s important that your employees order from them rather than elsewhere.
Having an accurate way to approve spend before it happens, whilst having clear visibility of how your budget is being allocated in real-time, can help your organisation keep its financial planning more efficient and responsive to your changing needs.
2. Enhance your data quality
For 51% of CFOs who took part in our Care Trends Report 2024, delays between systems passing up-to-date data is their biggest challenge when managing information. And when you haven’t got precise figures when you need it, how can you be sure your service is keeping in budget or is able to react if unprecedented changes were to happen?
Having all your accounting needs in one place helps to ensure a single source of truth. Robust software solutions can give you a clear view of your entire purchasing management processes. That way, you can track the performance of your organisation’s purchase requisitions against your budget as it comes through, meaning you’re no longer caught off guard by unexpected costs.
3. Streamline your bookkeeping process
Bookkeeping can take up a significant amount of time, especially if your organisation relies on manual processes to manage your financial data. 39% of CFOs even told us their number one priority for their finance team in the next 12 months is reducing the amount of time they spend amending inaccuracies.
When you can streamline bookkeeping, financial processes become more accurate and efficient, so instead of having to spend hours a month amending errors and looking for matching receipts, your team can focus on other key priorities.
Financial Management software for social care providers
Software like Financials allows your finance team to accurately manage all elements of accounting, such as a flexible general ledger, accounts payable and bank reconciliation. And by having all your financial processes managed in one place, it means you can access real-time reports, drilling down into key financial information at the click of a button.
Financials is our cloud-based finance management software that allows your finance teams to manage all accounting processes whenever they need it. Financials can seamlessly integrate with our Spend Management solutions too, so you can confidently manage all of your financial and spending needs in one place.
For more details, check out our webinar all about Financial Management in social care here: The Impact of Financial software in the Care Sector