Guides
Cash flow for a home care agency: the books an owner has to keep
The ledgers a home care agency owner needs to run cash flow, from payroll registers to visit logs, receivable aging, and caregiver mileage records.
What to take away
- Keep a payroll register by pay period and a separate caregiver file holding credentials, screening dates and expiry dates.
- The visit log is the source document for billing; if scheduled hours and worked hours are not reconciled weekly, invoices drift from payroll.
- Track receivables by payer, because a provincial contract, a long-term care insurer and a private family all pay on different clocks.
- Reconcile the operating account monthly against the payroll register, the visit log and the receivable aging.
- Retain employment, payroll and tax records for the period the Canada Revenue Agency or the Internal Revenue Service requires, and confirm that period with your accountant.
- Keep a cash receipts and disbursements book and a caregiver mileage log; both feed the general ledger.
Cash flow for a home care agency is a timing gap between wages paid this week and money collected next month. The books an owner keeps make that gap visible early enough to act on. Six core record sets do the work, with two supporting books underneath them.
The six books and records a home care agency owner must keep
Each record set below answers a different question and feeds the general ledger. Two supporting books, the cash receipts and disbursements book and the caregiver mileage log, sit underneath them.
Six record sets for agency books
- Payroll registercaregivers paid, hours, CPP, EI
- Visit logscheduled vs worked hours per client
- Caregiver personnel filecredentials and expiry dates
- Service agreement filesigned client plan and rate
- Receivable aging by payer30, 60, 90 days
- General ledger and bank reconciliationties records together
- Payroll register.List every paid caregiver, personal care aide and home health aide in the pay period. Include hours, rate, CPP, EI, and provincial workers' compensation premiums. It is the largest cash outflow and shows shortfalls first. Gusto Simple starts around $40 a month plus $6 per person. QuickBooks Payroll Core starts around $50 a month plus $6 per person.
- Visit log and billing ledger.Scheduled hours against worked hours for each client visit, with arrival and departure times. This is the billing source document, and it catches unfilled shifts. Post each approved visit to a client billing ledger, one line per invoice, with payer, invoice number, amount and due date.
- Caregiver personnel file.Keep credentials, screening dates and background check dates. Add first aid and food handling certificates, with expiry dates. Lapsed certificates stop a caregiver from being billable.
- Service agreement file.The signed plan for each client: authorized tasks, hourly rate, billing frequency, and who is responsible for the account. Private-duty agencies often store these in AxisCare, WellSky Personal Care or AlayaCare, which tie the agreement to the schedule and invoice.
- Receivable aging by payer.One line per payer, aged 30, 60, 90 days. Provincial contracts, insurers and private families pay at different speeds. HHAeXchange and Sandata produce claim and billing reports for Medicaid and state EVV programs. QuickBooks Online and Xero track the same aging for private-pay invoices.
- General ledger and bank reconciliation.The account of record that ties the other five together. QuickBooks Online Simple Start typically lists near $35 a month, and Xero early plans typically run $20 to $35 a month. Wave's starter accounting is free, with card payments typically 2.9% plus $0.60.
The home care agency software and KPI guide covers which of these a scheduling or billing system should produce automatically, and which stay manual.
Keep a cash receipts and disbursements book. Enter every deposit, check, EFT and card payment, dated, with payer or payee and category. This book shows whether cash on hand covers Friday payroll. Run it in QuickBooks Online, Xero or a spreadsheet whose columns match the bank statement.
Keep a caregiver mileage log: date, caregiver, client, miles and rate. The IRS standard business mileage rate is 70 cents per mile for 2025, up from 67 cents for 2024. The Canada Revenue Agency rate is 72 cents per kilometer for the first 5,000 km in 2025, then 66 cents.
Keep an expense ledger with vendor receipts for supplies, PPE, training and software. Note the vendor, date, amount and category. These records feed the general ledger and support the deductions your accountant claims.
Why the visit log drives billing and payroll
A caregiver clocks in at 8:00 and out at 9:15. The office scheduled 8:00 to 9:00. That fifteen minutes is unbilled wage unless someone reconciles it the same week.
Weekly visit log reconciliation
- Compare scheduled hours to worked hours per caregiver
- Flag every variance over your tolerance
- Decide billing correction or scheduling problem
- Bill from visit log, not schedule
Run the reconciliation weekly, not monthly. Compare scheduled hours to worked hours per caregiver, flag every variance over the tolerance you set, and decide whether it is a billing correction or a scheduling problem. A monthly reconciliation finds the gap after the invoice has gone out.
Billing follows the visit log, not the schedule. If the two are allowed to drift, the agency pays for hours it never invoices.
Payroll, on-costs and the rate question
Every caregiver hour carries more than the wage. Canada Pension Plan contributions, Employment Insurance premiums and provincial workers' compensation premiums sit on top of the hourly rate. Unpaid travel between clients is time the agency pays for without billing.
Employer on-costs typically add 12% to 20% to a caregiver's hourly wage in Canada, depending on province and wage level. Confirm current CPP, EI and workers' compensation rates with the Canada Revenue Agency and your provincial workers' compensation board.
The arithmetic is the owner's to run with their own figures: take the hourly wage, add the employer on-cost percentage, add mileage and travel time per visit, and divide by the billable hours in the visit. That gives a floor rate. Compare it to what the payer actually pays before assuming a visit is profitable.
Receivables and the payer clock
A private family may pay within two weeks. An insurer may take 45 days. A provincial contract may run 60 days or longer. An aging report that lumps them together hides which one is actually late.
Age receivables by payer, not in total. When one payer's 60-day column grows for two consecutive months, that is a collections problem, not a cash-flow problem, and it needs a name attached to it.
Common questions
What is the single most important record?
The payroll register. It is the largest outflow, due on a fixed schedule, and every other record either feeds it or is reconciled against it.
Do I need separate books for each provincial contract?
Not separate books, but separate revenue and receivable tracking. Contract terms, billing formats and payment timelines differ. A single blended revenue line will not tell you which contract is underpaying.
How long do I keep these records?
Employment, payroll and tax retention periods are set by the Canada Revenue Agency and, in the United States, the Internal Revenue Service, whose guidance on what kind of records to keep is a useful starting point. Confirm the period that applies to your agency with your accountant.
Where does data security fit in?
Client and caregiver records are personal information, and small agencies are targets. The NIST small business quick-start guides and CISA guidance for small and midsize organizations both give practical starting points for protecting them.
What should I check before buying software?
Ask which of the six records the system produces, in what format, and whether you can export them on demand. Test the export before you sign, not at renewal. Compare AxisCare, WellSky Personal Care, AlayaCare, HHAeXchange and Sandata. Look at scheduling, EVV, billing and export.
