The myHomecare group is a combination of pioneering brands that stretch out over 90 years of operating history. myHomecare provides care to older Australians to help them live happily and independently in their own homes for as long as they choose.
They are the largest home care package provider in the country, supporting over 12,000 packaged clients and over 20,000 clients in total. The group delivers close to 1 million hours of direct services per year and nearly double that through a contract and indirect workforce.
myHomecare process 50,000 invoices each month from small vendors for mowing, cleaning, meals and transport services to large platform providers with hundreds of staff provided.
The volume of paperwork puts an enormous administrative burden on the operational and finance teams.
Most of the care services invoiced are high frequency and small dollar values; a $40 Jim’s Mowing voucher here and a $50 Meals on Wheels voucher there. Each time, the aged care manager needed to log into the care system to enter this cost against the client’s account and ensure the most accurate recording of the expenditure of the client’s funds. The invoice can then be authorised and processed into the ERP and, now under new Improved Payment Arrangements Act (IPA) legislation, receive the government payment for services provided.
There is no integration between the care system and the accounts payable system, and if the claim isn’t processed, myHomecare is out of pocket for that amount.
“In one of our organisations, we were processing about 14,000 invoices a month, which created a significant amount of work just to route for approval and then record it correctly. It was causing a lot of rework and delaying the Statements that go out to our clients. Of those invoices, 83% of them had a client charge related to them, and I was concerned that human error might mean that the invoice was not as accurate as we require, and we couldn’t deliver the very best for our clients,” said myHomeCare CEO Stuart Miller.
“And given the margins that the industry works on, it would only take a small number of errors to impact the profitability; we could quickly be losing money.”
Working with Redmap
myHomecare turned to Redmap to automate the receipt and processing of their Vendor invoices.
They also needed to ensure that they had visibility on the invoices expected that month to manage the business’ cash flow.
“It wasn’t a straightforward process to automate because of the nature of the industry. We have a huge number of vendors and so many of them are sole proprietors, mum and dad organisations, working with no system or an unsophisticated system. About 3 to 5% of the invoices we receive are handwritten, and there’s no consistency to the way the information is displayed,” said Stuart. “Plus, the transactions have to be processed in two separate systems – the care system and the ERP.”
“I am so happy that we implemented Redmap when we did, now dealing with the requirements of the government’s Improved Payment Arrangements Act (IPA), our visibility is complete; I can see every invoice and where it is.
As I started to grapple with the impact the IPA had on the organisation, I realised I needed different access to the data and had a bunch of reports that I needed written. Redmap had it turned around within 24 hours for me. They were incredibly responsive to anything we needed.”
Closing the payment gap
“What the myHomecare team were doing was touching every invoice to route it to the right Care Manager based on the client in the care system. We expanded the data that we extracted from the invoice and located the client’s name and service date,” said Ben Woolley, Redmap CEO.
“This took an amount of effort to get right as there is no consistency in the invoices and where data is displayed. But now that the system is finely tuned, it means that the majority of invoices are skipping the first handling by the Accounts team and going straight to the Care Manager for approval.”
This data is then used to link the care system record with the AP record, and this means that the opportunity to miss revenue is removed, closing the gap.
“Implementing AP automation with Redmap will mean that 75% of the invoices, about 37,500 of our 50,000 a month, will go straight through to be processed without finance needing to do a thing. That’s an enormous efficiency gain,” said Stuart.
The Improved Payment Care challenge in community care
For myHomecare, the AP Automation project was particularly timely due to the recent legislative changes and introduction of the IPA. Instead of receiving a client’s care budget upfront, community care organisations like myHomecare needed to log every client service (known as an event) against the appropriate client account to be submitted as part of a monthly claiming process.
In practical terms, this shift meant that invoices that weren’t married up to the client account could result in revenue leakage or, at the very least, a cash flow gap between payment and claiming opportunity. Vendors were chasing payment, but the care person may not have logged the invoice with the CRM tool that manages the client budget. This left the community care provider out of pocket.
“It’s tough because the case managers suddenly need to be involved in the finances as well. The whole sector is going to struggle, and we believe that cash flow will tighten,” explained myHomecare CFO, Arthur Zouras. “The whole market has underestimated the impact.”
A winning outcome:
Redmap has been a gamechanger for us. When those changes came into play on 1 September, we were able to transition through to the new IPA system with minimal issues,” said Arthur. “It means that the team can focus on doing a great job for our clients rather than shuffling paperwork around. Imagine trying to keep track of 50,000 paper invoices a month without a tool to assist!”