Opinion: Finance technology can salvage the care sector

Ian Johnson, Senior Vice President of Market Development at UK fintech Soldo, a leading spend management platform, shares his views on why it is vitally important that care homes should utilise finance technology to help gain visibility and control of spending, especially during today’s current climate.

The cost-of-living crisis continues to make headlines. Despite more generous tax relief for carers, this month’s Spring budget did little to provide the care sector with the support it needs. The lack of additional funding will leave many businesses having to choose between eating, heating and investing in their own services.

Without additional investment and increased government support to match the increase in fuel and energy bills, businesses are operating on wafer thin margins.

It’s vital that they take control of spend and save time and money – two things we know the sector doesn’t have much of. Our survey of over 250 care sector professionals found that just 19% use technology to keep an eye on what’s being spent. Meaning, many are still managing spend manually, making it difficult for them to truly keep track of their finances.

Without real-time oversight of spending, it’s difficult for finance teams to have insight on where surplus or unneeded spend is costing businesses, and importantly where they could save.

Managing spend in the care sector

Our survey asked care sector employees about their place of work’s monthly outgoings, what they were spending on, how they managed the spend and more. We found four in 10 (40%) of care sector employees – support workers, carers, and office-based teams like marketing, finance, and HR – are making purchases on a weekly, or daily, basis and almost a quarter (22%) of these teams have a monthly budget of £1000.

The shocking findings uncovered from the survey reveal that there are vast amounts of outgoings across the care sector, across a number of different departments. Without the tools necessary to track payments in real-time, wrapping up finances at the end of the month could be a challenge, and sometimes a nasty surprise, for the finance team.

We understand that 46% of this spend is on catering and 30% on facilities management – both areas that will continue to be affected by rising prices in the cost-of-living crisis. Therefore, having visibility and control of this will be a necessity to understand what savings can be made.

Empowering employees through technology

It’s an understatement to say that the care sector is busy. With many people to look after, facilities to run, families to support – the list is endless. The last thing those working in care need to worry about is setting time aside to manually manage finances, yet this is the reality for the industry. Shockingly, our report titled cost of business crisis: Why now’s the time to rethink expense management also found that 67% of workers across different industries in the UK, including those working in care, use their personal funds for work-related purposes at least once a week. A fifth (20%) said they put their hand into their own pocket daily – which of course creates paperwork, can lead to resentment regarding payback speed, and leaves organisations open to unexpected purchases.

By rethinking expense management and replacing reimbursements with a system of company cards, the sector can gain better visibility into spending. Employees’ lives can also be made easier so they no longer need to pay using their own money. In addition to this, finance teams gain greater control over budgets as they can set spending rules and limits for individual cards or for teams. A win, win.

It’s likely challenging times will continue for the care sector as costs increase. While much of this is outside of businesses’ control, it’s important they have the right tools to control what they can – and one of those things is unneeded overspend. What’s more, the right tools give employees back time – so they can get back to doing what they do best, caring for people – not submitting expenses, which could be a painful and lengthy admin process.

Image: Soldo and Annie Spratt and Markus Winkler