What every CFO in the care sector needs to know about data analytics
The landscape has become a lot more challenging for CFOs of community care organisations. New funding models for both aged and disability care services are having a significant impact on how organisations receive and must account for funds.
Nobody is 100% sure how the changes are going to play out long-term. Often the CFO is expected to have answers ahead of time. Your CEO, COO and other executive and team leader personnel will look to you for guidance and / or wait for you to advise about how the new model is impacting budget, cash flow and operations.
The answers may be closer than you think. The bulk of information you need to make sense of the funding-finance relationship is in data your organisation already collects or at least has access to. Data is your biggest asset and harnessing it is the way forward to a clear vision for your organisation.
The three most common funding model pain points
1. The shift from up front to staggered funding
2. Funding now follows consumers, not organisations
3. Increased administrative and reporting load
Every CFO is experiencing pressure in one or all of these areas. The primary reason for the pressure is that while the landscape has changed, the expectation on the CFO and finance team is that they do the same job as before, but with greater efficiency.
The shift to staggered funding, that follows consumers, has major cash flow implications. In essence it requires the complete re-working of business models, with different levels of planning and attention to detail. Add to that the increased admin burden to meet new compliance and reporting requirements and it’s a big headache for the finance department.
When facing information overload how you organise and use information is key
Now that you are wrangling more information and meeting new demands, it is more crucial than ever that this process be streamlined. Many community care organisations are still working with disparate systems, various unconnected spreadsheets, and a siloed approach – all of which has been somewhat manageable, up until now.
But as your team is expected to do more with less, and have answers to questions they didn’t use to, the best thing you can do is ensure information is gathered with consistency and available to be seen and analysed with ease.
Advanced data analytics provides a single pane of glass view
Traditionally managing the business from a General Ledger perspective out of the ERP system provides some visibility but it is limited. Rather than your team having to fill in the gaps by manually drawing data from each different system, the right data analytics system does this for you. And it’s not just finance information you can collate and see.
The right data analytics solution provides full visibility, across the organisation, through a single pane of glass. This gives you access to early warning signs of any financial problems and regular, reliable, measurable insights on how the organisation is tracking against strategy.
In short, the concrete benefits of using advanced data analytics to support your transition to the new funding model are:
– Streamline how and where you get business insights from and how they are viewed and analysed
– Use these insights to inform and align with business strategy and goal setting
– Gain a clear and consistent picture of cash flow – including client funding and the sticky issue of over-claiming / unpaid claims
– Use cash flow clarity to inform budgeting, planning and reporting
– Get better visibility about areas of the organisation that are incurring extra costs and areas where potential profit can be made – for example, profit margins by service line or region available at a glance
– See what impacts customer acquisition and retention
Flow-on effects that impact all areas of operations
In smaller organisations, CFOs often double up as COOs. Whether this is true in your case or not, it’s still good to be aware how much data analytics can improve operations and service across all areas.
As mentioned, the benefit of the pane of glass view is that you can see all relevant data sets at once – not just financial. This includes information such as: rostering, staff training, compliance requirements, new client acquisition, referral sources, client exit information.
What you learn from insights in these areas can have a significant impact on staff satisfaction, performance and retention, client satisfaction, marketing strategy, service provision and service offerings.
With the right data analytics software in place, what started as an overwhelming morass of information needing to be manually gathered and sorted, is streamlined into simple, visible and powerful dashboards. No hardware investments required.
Get in touch with us to arrange a no-obligation demo, or for more information, download our ebook: Community Care Guide to Data Analytics.