In the world of social care, rejected invoices can cause significant delays to your organisational processes and wreak havoc on your cashflow. And according to research by the Institute of Health and Social Care Management (IHSCM), more than one in five home care providers feared the collapse of their business in the next six months because of unpaid bills, with around 60% of respondents having at least one or more invoices still unpaid after six months.
It’s clear how crucial it is to avoid late or non-payments to maintain financial stability. If you're a small to medium-sized provider, it can be especially tough when you don't have the financial cushion to keep things ticking over until the invoice is paid.
Or as a larger multi-sited social care service, inaccuracies can have a knock on effect to other areas of your organisation, and may even impact the trust and relationships you have established with your stakeholders and funders.
In this blog, we delve into the sorts of reasons why invoices can get rejected and how care business management software can help you improve your invoice accuracy.
Why your invoices may be getting rejected
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Complex calculation errors
Complex invoicing is a key challenge in social care today. We found in our Care Trends Report 2024, that 28% of care providers manually change invoices after initial creation. Perhaps that doesn’t come as a surprise to you. Things like shared care, uplifts to charge rates and split funding can all cause complexity when it comes to invoicing.
These mistakes can cause confusion, delay payment being made and can ultimately leave you with significant cashflow issues when your incomings aren’t keeping up with your outgoings. And it’s clear from our survey that many providers then find themselves having to manually correct and reinput invoices to ensure accuracy.
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Incorrect information / format
With the number of complexities that often come with invoicing in social care, mistakes can happen; especially if you are manually managing your finances. Overcharging, undercharging or incorrectly imputed data can all be reasons why you are getting push back on your invoices.
Even the smallest error in your invoice can halt a payment being made; misspelling client names, using the wrong invoice format, duplicating invoice numbers or missing dates are just a couple of reasons for someone to reject your invoice. All of which could be having an impact on the trust you work hard to build with your clients, funders and regulatory bodies.
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Lack of compliance
It can be the case that social care providers receive funding from various sources, each likely having their own specific guidelines around invoicing. An invoice for a private client will likely be different to an invoice you send to your local authority. But if you’re not careful, small variations can be missed.
And if you haven’t met the standard set for these regulations and guidelines, your invoice can be rejected. Without this funding, cashflow can become an issue and care quality may be impacted because of it.
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Missed timescales
Errors in your initial invoice takes time to correct. Time you may not have in a busy service like social care. And if you can’t get the amended invoice sent in the timeframe given, it can be considered invalid, and therefore, goes unpaid for even longer.
Knowing when your invoices are due and tracking their payment status can help you monitor your budget and manage your cashflow. And when you have better control over your invoices, it can help you maintain positive relationships, avoid late payments and ensure a smooth operation of your vital service.
How software can help social care organisations reduce invoice rejection
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All scenarios are considered
Purpose built software allows for clear and accurate invoicing, no matter your circumstances. Different funding arrangements, shared care, uplifts, or split funding can all be considered within a care business management solution, making your invoice processes more efficient and accurate first time.
Think to a time when you’ve had to struggle through a complex invoice. Perhaps you organised a day out for five of your residents, with three of your staff members allocated for this trip. How do you calculate that shared care? Flick through multiple spreadsheets, scribble notes and tap away on calculators. No more. Dedicated care software can do all those calculations for you within a few clicks.
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Private & Local Authority flexibility
A thorough software solution may allow you to differentiate invoices for both your private service users and your local authority. These invoices can be designed to meet the unique requirements of the funding body. And because you don’t have to rely on memory or manual processes, you can ensure all records are correct and complete, such as client names, care details and dates.
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Allows retrospective uplifts
Flexible software is designed to keep up with you, even when plans change. That’s why digital tools like Care Business Management let you apply retrospective uplifts to charge rates after you’ve spoken to your private funder or local authority. So instead of recreating the invoice from scratch, you can digitally reproduce the original invoice with the newly calculated amounts.
Have more than one invoice that needs amending? No worries: comprehensive software can allow you to perform these changes in bulk whilst accounting for any payments that have already been made against those individual invoices.
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Data insight & auditability
A single integrated software solution allows you to manage all key areas of your business operations in one place, putting you in a better position to analyse your invoice data, gain valuable insights into patterns and trends, identify any cost-saving opportunities or aged debt and make more informed decisions because all your data is collated in one system.
Dashboards may even be available to you so you can see when the time spent with a client was less than planned. That way, you can explore whether your staff are under pressure to get to their next call and plan how you can support them or amend your client’s invoice.
Our Care Business Management solution is packed with vital functionalities that give you control over your invoices. Get started on your software journey today!