We recently surveyed hundreds of the care sector employees to understand how they are using spend management systems to manage spending and expenses. The majority are still relying on outdated manual processes, which makes it more difficult to navigate rising prices, high staff turnover, and unpredictable cashflow.
We discovered that teams across the care sector were regularly making purchases, including support workers, carers, and office-based teams like marketing, finance, and HR. And nearly 40% of them were spending on a weekly or daily basis. Department spending is varied but 27% have a monthly budget over £1000, suggesting that any cost-saving initiatives could have a big impact on overall expenditure. What’s more, 28% have more than 250 employees in their organisation. This could mean that finance teams are dealing with large amounts of manual admin as they work to reconcile a high number of transactions across different departments and budgets.
With 50% spending on travel and entertainment, 46% spending on catering, and 30% spending on facilities management, the care sector is set to feel the impact of current UK fuel, food, and energy price rises particularly acutely. As we face further energy price rises this winter, heating bills for care homes are likely to soar. That’s why it’s even more important for care-sector managers to get a grip on their spending, to understand where their money is going, and identify what can be saved.
Our survey revealed that only 19.6% of the people we spoke to use a spend or expense management platform to deal with spending and expenses. This figure rose to 34.8% for those in office-based roles but fell to 13.9% of support workers and carers. And of those who spend weekly or daily, two thirds are still relying on manual processes. Automation is used in less than a fifth of organisations and it appears it isn’t used uniformly across all job roles. Instead, it’s more centralised around functions like marketing and finance.
Additionally, those who said they used a platform also mentioned relying on credit cards, emails to managers, bespoke systems, and spreadsheets. So, it seems that there is still a lot more scope for automation. This assessment was echoed in a recent podcast with Soldo account manager Daisy Robb. Alan Rustad explained that “some are embracing (technology) but other are still very slow to embrace it”.
With only 14% of the support workers and carers we surveyed using an expense or spend management platform, the vast majority are relying on manual processes to manage finances. This includes 38% using credit cards (which are more vulnerable to fraud and can’t protect businesses from over-spending) and just over a third relying on individuals to pay out of pocket and sort reimbursements (which creates paperwork, leads to resentment amongst staff, and leaves organisations open to unexpected purchases). Carers and support workers are also spending in areas most affected by inflation – travel (52%) and catering (47%). And they are managing spending regularly, with just over half spending at least a few times a month.
This level of spend equates to a third of the staff spending at least half a day a month on financial admin. This additional paperwork takes them away from their caring responsibilities, adds frustration, and wastes time. With vacancies running at a record high of 13.5% and staff turnover at 30%, managers need to find ways to attract and retain staff.
Reducing the paperwork associated with expenses, making processes quicker and easier, and ending the reliance on individuals using their own money to cover increasingly expensive essentials like petrol can all help. And this can be achieved with technology. Automating spend management removes the reliance on cash. It reduces the time that individuals need to spend on expenses, as they can take quick photos of receipts and enter spend data at the time of purchase. And no one needs to pay out of pocket. Every type of payment can be made with pre-paid cards. This gives users more freedom, but it also gives finance teams more control over budgets as they can set spending rules and limits for individual cards or for teams.
Despite the potential benefits for carers and support workers, there’s still a way to go. As Paddy Gardner states: “there is interest (in technology) from the frontline workforce…they’re still not being involved as much in the decision-making process”.
“Cash is still king” in the care sector, states Daisy Robb. Petty cash is used in 68% of the care homes we spoke to, by 68% of support workers, and by 74% of organisations with more than 1000 employees. This means that many finance teams don’t have full visibility or control over every payment being made. While petty cash use may be recorded in a physical book, this results in manual data entry as purchases need to be transferred into spreadsheets. Petty cash books are easily misplaced and receipts are easily lost, which means that finance teams waste time chasing information and can’t reconcile purchases at the end of the month. In short, petty cash can’t support modern organisations.
Switching to an automated platform removes all these problems and enables finance teams to track every penny. Although individual petty cash payments might be low value, rising prices for petrol or office catering mean these can soon add up. When finance teams have a complete picture of spending, it’s easier to identify unnecessary or wasteful spending, cut back on specific types of purchases, and make the most of bulk discounts or combine orders to minimise delivery costs. All of which is essential as the care sector navigates ongoing economic uncertainty.
With prices continuing to rise, pay rates plateauing, and a recession looming, the care sector must find ways to take control of non-staffing spending and reduce costs. Automation is a key step towards this, as manual processes cannot give finance teams the visibility or insight they need to effectively manage, plan, or forecast spending. In addition, as they deal with an ongoing recruitment crisis, automation is a vital tool to making roles easier, more rewarding, and more appealing.
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