Automating debt management improves performance of aged care providers – opinion

Many Australian aged-care providers are finding themselves in a challenging position. On the one side there is increasing demand for services as the population ages. On the other, residential facilities are having to contend with both rising operational costs and constrained budgets.

Recipients of aged-care from aged-care providers are also reportedly experiencing greater difficulty paying their bills, and as Australia’s cost of living crisis continues to bite, those relying on a pension as a sole source of income can be in a particularly problematic position.

The knock-on effect of bad debts

Unfortunately, as many leaders who’ve been in business for more than a few minutes can attest, it’s all too possible for a client’s financial difficulties to become those of the businesses that are supporting them.

Cautionary tales abound, of businesses that have had their cash flow and bottom lines bedevilled after being blindsided by a barrage of bad debts.

The subsequent struggle to pay staff and bills can send otherwise profitable aged care enterprises to the wall – and so the misery cycle continues, down and down the line.

Making debt collection more efficient

When accounts become overdue, it’s the responsibility of the accounts receivable department to handle all activities associated with recovering the money owed. However, poor debt management and collection practices can result in errors that slow the payment cycle and leave money uncollected.

If an aged-care provider has a high volume of invoices and relies heavily on manual processes, it can be challenging for an accounting team to keep on top of things. In today’s tight times, this is not a position in which they want to find themselves.

This is where modern, cloud-based revenue management technology can come into play.

The benefits of automation

Automating the debt management and collections process can introduce additional rigour to the revenue management journey and accelerate the pace at which clients settle their accounts, particularly for in-home provided care. This, in turn, mitigates the risk posed by delinquent debtors.

It is important for aged care providers to choose a revenue-management platform that best meets their particular requirements. The platform should combine billing, dunning, and
collections in a single solution. This means the provider will be able to proactively manage collections, reduce outstanding amounts, and improve cash flow.

It also provides an unparalleled opportunity to minimise bad debt write-offs, enhance employee productivity, and improve customer satisfaction. Indeed, a study by Aberdeen Group found that automated solutions generated a 15 per cent reduction in payment time over manual processes.

Care providers can also enjoy the advantages of centralised data, enhanced ability to forecast
payments and cash flow, and improved customer relations. This is due to the fact that all payment-related communications will be both timely and accurate.

Maintaining a sound financial footing

The coming years will be challenging ones for Australian aged care providers, as individuals and organisations struggle to keep on top of their outgoings and slow the rate at which accounts are often settled. Optimising debt management and collections will make it easier for care providers to mitigate the risk this represents.

When a provider implements an automated revenue management platform, they will be able to put the process on autopilot while also improving profitability and employee productivity.

If a provider’s goal is to strengthen its financial position, deploying such a platform should be a priority as it is foundational technology that’s needed in the central ICT stack.

The end result will be the provision of high-quality aged-care services to a growing number of people across the nation. That’s a result that benefits both care providers and their clients.

Carl Warwick is regional sales director of Asia Pacific and Japan at BillingPlatform, a cloud-based revenue management platform. He joined the company in 2021 and has more than 20 years of sales, business development and account management in the IT industry having previously worked for organisations including Zuora, NetSuite and Network Associates.