Aged care centres in Australia are operating in a precarious time, and it’s now more important than ever to minimise costs. Automation saves time and costs exceptionally well, and it frees these centres to provide better care to seniors who depend on them.
Although it may seem minor, traditional methods of processing expenses are costing aged care providers more than they know. But, unfortunately, most centres don’t realise that there’s an easier way. So let’s take an in-depth look at expense management for aged care, and how it can be better.
There’s a saying by entrepreneur Peter Baskerville that goes, ‘The ignorant are ignorant of their ignorance.’
It sums up aged care expense management in a nutshell. Many centres stick to their old methods of processing expenses not because they want to but because they don’t realise expense management can be automated.
If you’re in an aged care centre, you’re probably using one of these methods to manage day-to-day expenses such as buying items for your centre's arts and crafts.
1. Petty Cash
Petty cash is by far the most common expense management method used in aged care centres. It seems easy to allow staff to take money from a pre-existing cash fund or 'activities' budget for a small ‘Woolies run’ and return with a receipt. However, employees are limited to smaller purchases, and it leaves the bookkeeper stuck with tedious manual work in reconciling these purchases.
2. Cash Advances
Sometimes staff are given cash in advance, and the expenses are accounted for after the transaction occurs. Besides the hassle of reconciling the exact transaction amount, there’s also an unnecessary back and forth between employees and finance teams when managing surpluses, shortages, or cash.
3. Employee Reimbursement
Reimbursements are perhaps one of the worst ways of handling expense management. Employees would have to pay for company expenses using their own money and be reimbursed weeks later. It's not only frustrating for staff to use their own money, but it’s also prone to loss of receipts and unnecessary paperwork in submitting claims.
More importantly, it also creates an unnecessary burden on aged care staff. Reports show that aged care workers are only left with $100 per week after paying off rent and bills from their salaries. Paying for company items is an unneeded burden and is highly demotivating for hardworking staff.
4. Corporate or Business cards
Corporate credit cards are said to be the ‘gold standard’ when paying for centre-related expenses, as staff don’t have to claim for it or use their own money. However, aged care centres need to meet a certain revenue to qualify for corporate credit cards, and these cards lack real-time visibility on expenses and budgeting control.
Plus, banks will only provide a limited number of cards, leading to a messy card-sharing system that goes against the bank’s policy.
Sticking to what we know may seem harmless; after all, why fix what’s not broken? But what if aged care centres could implement a better system? What if all purchases came out of pre-allocated budgets and were automatically reconciled in a system - all without lifting a finger?
Things to Consider About Your Centres’ Expense Management Process.
Process and Efficiency
The traditional ways of managing a centre’s expenses are like fire-fighting. They are highly prone to errors like losing receipts and keying in the wrong expenses numbers, which means that administrators often try to right wrongs and put out fires instead of improving their residents' quality of care.
Isn’t this process unnecessary? You bet. 56% of companies report that their most significant pain point in expense management is losing receipts. An aged care centre’s expense management process should be simple, safe, and effortless.
Indirect Costs
There’s a reason why automation is becoming so popular among aged care centres. With many of these facilities struggling with serious staff shortages and a lack of government subsidies, it’s important to find different ways to save costs.
Businesses that embraced finance automation have saved almost 70% of finance operation costs, and it’s not hard to see why. Automation saves indirect costs from:
- Loss of receipts
- Loss of time spent on manual work
- Loss of money from expense fraud.
In fact, only 27% of businesses have systems to flag out-of-company expenses, which gives way to a multitude of expense fraud from staff.
Staff Workload
Most centres are hesitant to automate because they believe their employees might not welcome the change. We know our nurses, care workers, and employees can be a little resistant to change. But adopting new systems can take only a week, and once you rip the bandaid off, it’s easier than you think.
Current statistics from Aussie businesses show that 26% of finance teams feel overburdened with manual work, and 97% of employees believe that automation can help their organisation. Minimising manual workload for staff decreases their burden and allows them to focus on what matters - giving care to seniors during a critical time in their lives.
Expense Management - Doing More with Less
For aged care providers, the right expense management system should be able to achieve the following goals:
- Eliminate all expenses paperwork
- Capture receipts so that they never get lost
- Reconcile all transactions with banks
- Set and allocate budgets
- Easily track where money is being spent
- Synchronise with accounting software
- Eliminate hours of manual tasks and no firefighting involved
A prepaid corporate card does that and more. For example, Budgetly’s software and prepaid corporate cards automatically reconcile the transaction as it happens, removing the need for manual accounting of expenses. Besides that, the Budgetly app also allows staff to capture and store receipts for each transaction, ensuring that receipts are never lost again.
By simply making small changes to the way expenses are handled, aged care centres can immediately see its positive effects on processes, costs, and employee morale. Budgetly has helped companies save up to 30 hours a week in manual work, which leaves them with more time to provide care.
Some things may not be broken, but it doesn’t mean that they can’t be improved.
Are you an aged care centre looking for a better way to manage expenses? Budgetly works with many Australian aged care providers to develop a better system that empowers their staff. To learn more about Budgetly, download our eBook, Managing Expenses with Budgetly. Alternatively, schedule a demo today for a personalised chat with our team.
