Outsourcing Functions of Your Home Care & Hospice Agency

Home care providers have several back-office tasks; some which can easily be simplified by outsourcing and others that are better served by having in-house agency staff handle it. So, which task falls where? Here are my thoughts- there is no absolute and each situation is unique. Consider your situation and what would benefit your agency the best.

Payroll

Okay, I retract the above statement…. Payroll is an absolute must when it comes to outsourcing. If you know me, you know I am pretty passionate about payroll even though we no longer provide payroll services here at Knight Home Care Financial. Payroll is so extremely critical to the accounting side of the business and the way payroll is handled can either ease your other administrative burdens or exacerbate them. I am a full supporter of outsourcing the payroll function, 100% of the time – no matter the size of the agency or situation. Note: Using Intuit or QuickBooks for payroll does not constitute “outsourcing payroll”. End Rant…. You can find a full blog or two on payroll, I won’t relive them here.

Billing

When it comes down to outsourcing, this one is a bit tougher. Your incoming cash flow is controlled by how well your billing function operates. In many cases, keeping these in-house serves agencies better because you retain full control over the timing of billing submission and do not add to the timeline by sending the information to a third party for submission. When billing is outsourced, you are at the mercy of the billing company to ensure they manage their workflow smoothly so that your claims can be billed in a timely manner, but you really have no control over this at all. You hope they do well, if they don’t you can leave but that doesn’t serve you well either.

In general, I recommend billing remains a function that is handled directly by the agency. This provides the best controls, opportunities for efficiency gains and proper management by the agency itself. However, if you do not have the capacity to hire a skilled billing person or the time to train someone into this position it is understandable to outsource the function for a period of time. My advice would be to set a goal of when this could be brought back in-house for the long haul. I also recommend that you closely monitor all activity of the billing company and require solid reporting from them so that you always know the status of your cash flow.

HR

Many agencies do not have a formal HR department or staff. Rather they have an administrative staff carrying this title and performing very loose HR duties. This is another task that is easily outsourced by home care providers. In this industry, there is a lot of HR compliance to be concerned with. Yet most do the bare minimum to get by such as employee documents, orientation and staff on-boarding. But there is much more to HR than just hiring and firing staff.

There are several HR support companies that provide piece meal services. Some of them are packaged and sold with outsourced payroll. This is an ideal way to get these kinds of services, as an add-on from your payroll service provider. Check with your payroll company to see who they work with and what all services are available. Most will offer labor law poster subscriptions, employee handbook reviews, employee document audits, one-on-one consulting to answer specific questions, full HR department audits and many other services. When offered through a payroll service provider these can be very affordable, especially when you look at the benefits you will receive.

Accounting

Surely you didn’t think I was going to leave this one off the list?? Of course not. Accounting is another area that is easier to outsource than many providers realize. With today’s technology a good accounting firm can work with you remotely, without paper and in real time. So much of today’s technology, especially financial apps, connect to form a seamless integration and flow of data. Progress and forward-thinking accounting firms utilize this technology to deliver real-time accounting services that deliver timely and accurate financial data to you on a routine basis. The days of mailing or hand-delivering your bank statements, check stubs and paper-based documentation to the accounting firm for them to then produce monthly report several weeks (or even months) later.

By utilizing available software, bank and credit card accounts are all connected to the bookkeeping records and sync’d each day. By automating the lower-level tasks of data entry higher level professionals can bring more value to your accounting by managing these data feeds, reviewing the final information and providing true guidance and coaching on a timely basis – all at an affordable cost that is lower than hiring a full-time in-house bookkeeper. When a professional accounting firm is managing your monthly accounting work, the year-end compliance reporting are almost completely removed! You will want to ensure you are working with a firm that knows your specific industry and can provide all the services you need done, a one-stop-shop (hint- we’re one of them).

 

In the end, outsourcing back-office functions often times leaves the owners and operators of agencies free to do what they do best – strategy, marketing, growth and development. Or maybe it is spending more time with the family or on the farm. Either way, the idea is to let go of those tasks that are better handled by someone else and put your focus on what you do best. As many professionals put it “owners should work ON their business, not IN the business”.

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About Knight Home Care Financial

Knight Home Care Financial is a Texas-based accounting firm that provides innovative accounting solutions for providers in assisted living, home health, hospice care, and nursing facilities. By focusing solely on post-acute and long-term health providers, the firm is able to offer tailored services that meet and simplify the business and regulatory demands of the industry. For more information, visit www.knighthcfinancial.com.