Being in charge of a care home’s finances can mean anything, from maintaining stocks and supplies to handling petty cash. And there’s no doubt COVID-19 has made this difficult job harder.
At Soldo, we’ve spoken with care homes to find out how we can help and better understand their financial challenges. Here’s what we’ve learned, and how we’ve implemented it in our spend management solution.
The financial challenges of COVID-19
We’ve found that COVID-19 has created three main challenges for the average care home’s finance teams:
- Distributing money quickly and safely.
- Managing spending despite all the temporary hires.
- Staying in control of your budget.
Many care homes are still reliant on cash to purchase small day-to-day items. But COVID-19 has forced them to catch up with the rest of the country, which has been getting more and more cashless for several years. In fact, in 2019, only 30% of transactions involved cash.
Diana Valentim, Finance Assistant of Cairn Mhor Childcare Partnership says, ‘We used to have a petty cash tin with notes and coins. When someone needed to buy bread or milk, they’d take what they needed from the tin.’
The World Health Organisation’s recommendation to go cashless during COVID-19 to prevent the spread of infection has lead many businesses to refuse cash payments, leaving care homes unable to use petty cash for purchases. ‘Our spending has remained broadly at pre-Covid-19 levels,’ says Diana, ‘but now we often can’t buy what we need unless we have a card.’
However, cards aren’t always the best fit for a care home.
When credit cards aren’t the answer
Care homes face many issues with using credit cards. The staff turnover is high, with an estimated 73.5% leaving within two years according to National Care Forum. Whether this is down to pay levels or the emotional and physical asks of the job is up for debate, but we do know that COVID-19 has made the work riskier and more demanding. Unsurprisingly, turnover is on the rise. SP&P’s Simon Parker says many care homes risk losing up to 50% of their staff in the coming months, while over 750,000 people have signed up to volunteer in health and care.
With so many staff coming and going, it’s no wonder credit cards don’t always work for care homes. Not only can reconciliation quickly become a bureaucratic nightmare, there are also serious visibility and accountability issues.
Keeping a handle on cash flow
A crisis is undoubtedly going to add pressure where cashflow is concerned. Generation CFO’s Christopher Argent says crises create ‘sudden, immediate change to your incomings and outgoings.’
If you’re going to get through, you must adapt – and be able to act quickly. To do this effectively, you’ll need visibility over your spending. Sadly, all of this is easier said than done when:
- Cash is inherently manual.
- Staff turnover and shift patterns make it harder to track spending.
As Diana notes, ‘When COVID-19 happened we thought “Oh my goodness, what are we going to do? How will we get to the banks, access enough petty cash, and make sure it’s distributed where it’s needed most?”’
Simplifying spend management
Soldo for care homes is our spend management solution designed specifically for care homes and their needs. It can:
- Replace cash with prepaid cards.
- Distribute money to staff quickly.
- Give you real time visibility and control over your spending.
How it works
With our system, you can set up as many prepaid cards as you need. You can top them up manually when you need to or set up automatic top-ups. You can also put a spend limit on each card, so you control what each worker can spend.
Importantly for care homes, the cards don’t have to be in someone’s name. Instead, we can use unique numbers or another word, such as ‘Kitchen’ so that they can be passed from a previous employee to a new one.
Getting visibility over your spending
Each card connects to a central dashboard, where you can see how much is being spent on each care home and what it’s being spent on in real time.
You can also:
- Set and adjust limits easily.
- Restrict what people can spend the money on. So you could allow care workers who travel to spend money on fuel, but not extend this to kitchen staff.
- Lock individual cards after one transaction.
- Set up automatic transfers, topping up cards at intervals or when its balance drops below a stated amount.
A companion app can also be downloaded onto people’s phones, so they can see what they’re able to use the card for. This can be helpful for new starters who can check the app instead of asking you or another staff member. Staff can also upload receipts, which cuts paperwork and simplifies reconciliation.
Soldo for care homes in action
Cairn Mhor originally used credit cards for expense management. But after an important staff member left the organisation, they reassessed.
Diana says, ‘We initially started using Soldo when a cook who worked between two of our homes left. We weren’t replacing him, so a credit card wasn’t going to work for us.’
Replacing named cards with numbered ones was a revelation to the team, ‘The fact that we didn’t have to have a named person on the card made it really easy for us to order. Anybody in the house could take the card to the supermarket and buy what they needed.’
Initially, Cairn Mhor restricted the use of the cards so they could just be used for large shops, but once COVID-19 hit, they started using the cards more widely.
An additional benefit to employees having their own cards, Diana told us, is that they can quickly buy PPE as soon as they find it.
From crisis springs opportunity
COVID-19 has highlighted the crucial and difficult job of care homes, and it’s also made it harder to do. But things can be made easier, and simplifying spend management is one area this can be achieved.
At Soldo, we hope we can make your job as easy as possible, so you can focus on what matters — caring for and improving the lives of the most vulnerable.
Need help streamlining your care home’s expense management process? Let’s talk about how you can distribute money to your staff more quickly, effectively and safely, in as little as one working day with Soldo.