Cashflow: Why It Matters to Your Home Care Business and What Are Your Options
Historically, most Home Care agencies have done their billing “in arrears”, which means that they bill for shifts after they’ve happened. This is common practice and somewhat convenient because the schedule is a known quantity and can be invoiced without too much fuss. As long as the schedule is adjusted and corrected before the invoice is made, the customer will be billed properly.
It may be convenient, but, as any business owner can tell you, the big problem with billing in arrears is that you end up having to pay your employees BEFORE you get paid by your customers. That means you have to finance payroll with reserves, a line of credit or some other kind of loan, or even risk not making payroll. It may feel like your ship is always sinking. This a great example of a cashflow problem.
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