Senior Living Accounting – when to replace your AP/GL solution?
A question we commonly hear from Senior Living facilities is: How do we know it is time to move off our all-in-one solution when it comes to Financials? In our experience, when a facility is so much as asking the question, that probably means the time to evaluate is now. While each facility is unique, there are common themes we see among those who need a new solution. In our experience, these are the Top 10 Reasons organizations make a switch:
- A Large Number of Locations or Entities – When an organization has 3 or more Locations, Facilities or formal Entities they need a solution to handle the complexity in the financial structure, transaction tracking and reporting requirements. In addition, security and internal accounting controls for the different functional areas and locations are required.
- Inter-Company/Inter-Facility/Inter-Fund Transactions – When shared transactions need to be spread among the proper companies/facilities/funds for proper reporting and accountability, you need an accounting solution that will allow these transactions to be entered once, with the appropriate Due To/Due From transactions automatically recorded to keep the accounting records in balance.
- The need for Multi-Level Consolidated Financial Statements – A good time to upgrade is once you have the need to have multiple layers of consolidation that roll up into the entire organization. A best of breed solutions allow for Financial Statements that can be consolidated in multiple layers and in different formats. Consolidations may be by Region/State, Type of Facility, etc.
- Self Service for Facility/Department Managers –Managers and non-accounting users need to have the ability to self-service reports and queries, and the ability to track the metrics they are responsible for and take timely corrective action. They need dashboards with drill down capabilities.
- Statistical Information on Financial Statements/Reports – organizations need to have operational and statistical information that can interpret their financial information and show trends. Revenue per bed, cost per ton laundry, salary breakdowns to census are examples of the metrics that are tracked.
- Better Budgeting/Forecasting Capability – budgeting and tracking against actual performance are critical to managing your organization. The need for multiple budget versions and what if scenarios can provide the ability to plan based on multiple factors.
- Gain an Automated Requisition/Purchase Order System with Work Flow and Approvals – Requisitions prepared and approved at the facility level that roll up into centralized purchasing allow for operational efficiency and cost control. Purchase Orders matched with the Vendor invoices provide cost validation and vendor performance tracking. Work Flow processes route requisitions and purchase orders for approvals based on pre-configured routing paths and rules. Spend control capability to prevent incurring costs that would create an out of budget scenario before they are ordered ensures fiscal responsibility.
- Need for Electronic Banking – Ability to create payment file to send to the bank to pay vendors electronically (save check printing and mailing). Ability to utilize positive pay functionality to prevent fraudulent payments. Ability to integrate with the bank and import transactions (ex. Importing cleared checks to eliminate manual entry and facilitate bank reconciliations).
- Have Revenue/Accounts Receivable other than Clinical – Our experience shows that many organizations have other revenue sources beyond Clinical that need to be managed. A best of breed accounting solution will give that ability.
- Integrated Fixed Asset System – Tracking and managing fixed assets is important and more difficult in multiple locations/facilities. Tracking cost, Construction in Progress (CIP), maintenance schedules, depreciation entries and disposals are important.