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Tips to Help You Manage Home Healthcare Payroll

in: Company News, Home Health Care, Accounting

Payroll business finance concept, Businessman analyzing financial data with Payroll icon on VR screen, Financial, accounting, home healthcare payroll

Many small businesses struggle to manage their payroll, but home healthcare payroll is often among the most challenging to manage. This is especially true for agencies with multiple locations. Not only must they account for each employee’s hourly wage, hours worked, mileage, and other components, but the challenge of managing data is multiplied by the number of geographic business locations.

Fortunately, home healthcare accounting software has come a long way toward helping agencies manage payroll. Here’s a look at the major challenges impacting accounting for the home healthcare industry, especially as they affect employee compensation, and how the right software can help you more easily manage home healthcare payroll.

Challenges for Home Healthcare Payroll Management

Payroll management is often challenging. Not only must companies track and manage their employees’ time, but they must also manage benefits and related employee compensation. Add to this the need to manage taxes and other required payments and you have a complicated set of laws and regulations affecting an entire area of accounting.

For home healthcare agencies, added pressures include the need to adjust salaries to compete against other skilled nursing professions in the local area, managing hourly and per diem workers, and managing a large group of mostly remote workers. Nurses, LPNs, and other skilled caregivers are rarely working in one place for any length of time. They may see several patients in one day, depending on the patient’s needs. This means travel time as well as remote work since the care team must log in from the road to note hours, patient medical records, requests for physician input, and more.

Clearly, this complexity adds yet another challenge to home healthcare payroll management. Fortunately, technology has kept pace to ensure that home healthcare agencies can manage their payroll effectively.

Other challenges include:

  1. Tracking attendance: In a typical workplace, attendance is tracked in multiple ways. Managers note who is in the office and who is not, or workers sign in via a punch card, magnetic key swipe, or similar method. Because home healthcare workers often leave their homes and head straight for the first appointment of the day without checking in at an office, it can be challenging to both note attendance and track hours. Did the person arrive at their first appointment on time? How do you account for this and how do you adjust for factors outside of their control such as traffic, patient emergencies, and so on?
  2. Varying pay rates: Not only does an employee’s hourly compensation vary from individual to individual, but that rate will vary depending on when they work. Many companies offer a basic hourly rate and then added compensation for evening or night shifts, weekend work, and holidays. Tracking these permutations accurately can be very challenging.
  3. Split shifts and overtime: What about employees who split shifts or track considerable overtime? A home healthcare agency payroll system must be able to track both with accuracy and ease.
  4. Schedule management: Additionally, a typical human resources and/or accounting department must note and track workers’ schedules to compare it to their actual work time. A good home healthcare agency payroll system enables this feature and makes it easier to track assigned working hours versus actual time worked.
  5. Tracking paperwork and documentation: If your agency requires that each employee completes their paperwork before logging off for the night, how do you manage this? Does the employee get paid for working that day if they fail to complete their reports? Care notes, care plans, and similar updates are all vitally important. How you link them to compensation and shift notation is up to you.

Some home healthcare agencies also track human resources and employee notes against the payroll file, too. For example, some may have a reminder tagged into the system that alerts the employee when their certifications are about to expire. If certification is tied to their pay level, it is in their best interests to renew before the certificate expires.

Choosing the Right Home Healthcare Agency Payroll Software

With so many challenges, how do you ensure your home healthcare agency is using the best software? Here’s our guide to choosing the right home healthcare agency payroll system.       

Take Notes on Your Big “Must Haves”

Start by listing the critical elements your agency requires in a new home healthcare agency payroll system. This may include:

  • Managing employee pay rates based on individual, job requirements, and more
  • Tracking attendance
  • Calculating benefits, leave, and sick time
  • Handling multiple shifts, split shifts, and night/holiday/weekend bonus pay
  • Validating shift completion, such as a way to link completion of care notes or visit notes with shift completion; integrating shift notes with time tracking
  • Interfacing with payroll processing companies, if required, to issue actual payments

Consider Cloud Software

Because most home healthcare agency workers travel to each appointment and log notes on the go, cloud software is essential. Cloud software enables employees to log into the system from any location that has internet access. Using a computer, tablet, or other mobile device, caregivers can log in from their car, their appointment location, or any other place, and include their notes (which triggers the attendance record in an interlinked system).

Cloud software tends to be less expensive to use and maintain than on-premises software, too, which is another bonus. Lastly, it offers better security against cyber attacks and system failures, since data is usually backed up in multiple places. It offers an ideal blend of cost-effectiveness, flexibility, and security for small business owners, including home healthcare agencies. Consider cloud accounting systems to better manage home healthcare agency payroll needs.

Look Beyond Industry Specific Solutions

As you search for the right payroll processing software, consider options beyond those marketed directly to the home healthcare industry.

Here’s one case study that may help put this into perspective. Mays Housecall is a home healthcare agency with 25 locations throughout Texas, Oklahoma, and Kansas. While the company invested heavily in the latest technology to serve its patients, it needed to bolster its technology infrastructure to better manage its business. That included finding the right home healthcare accounting software to manage payroll and other accounting needs.

The company looked beyond software marketed specifically to the home healthcare industry and found, upon consultation with Mindover Software, that a blend of enterprise resource planning (ERP) and third-party add-ons created the right tech environment to manage their business. The result was a strong infrastructure that enabled Mays to better manage their entire business, including their accounting function.

Free Home Healthcare Agency Software Guide

By now, you’ve probably realized that nights and weekends spent poring over spreadsheets trying to reconcile attendance and payroll is wasted time. Instead, using the right software can help you easily and quickly issue accurate payroll (and more).

We’ve put together a free guide to home healthcare agency software that will help you choose the right system for your needs. Download your copy here: Home Healthcare Accounting Software Guide.

Mindover Software

Mindover Software can help you find the right ERP for your business. We are your business technology partner. Contact us or call 512-990-3994.

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Started in Austin, Texas in 2000, Mindover Software has been providing award-winning software and consulting solutions spanning the business lifecycle to small and medium sized business. Now, with consultants in Dallas, San Antonio, Austin, Boise, and San Diego, Mindover Software provides strong local support with the resources of a national company.

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