June 4, 2026 · Accounting and Bookkeeping

Best Accounting Practices to Improve Finances of Long-Term Care Facilities

An image of a nurse helping a elderly lady at a long-term care facility in Oakville Ontario

Long-term care (LTC) encompasses a broad range of services, but at its core, it is a facility where patients reside for an extended period without receiving acute medical care. For instance, patients who have Alzheimer’s can’t live alone and need assistance. LTC facilities house patients who need care and basic nursing. Each LTC facility has a different medical billing procedure. They are understaffed and juggle with the rising cost of care.

LTC’s basic accounting needs are similar to those of any other business, including preparing financial statements, tracking expenses, filing taxes, budgeting, and forecasting. Yet they need specialized accounting that can manage the financial challenges unique to them.

Common Accounting Challenges of Long-Term Care Facilities

  • Payroll: LTC has high staffing needs, making payroll management, tracking employee hours, and handling employee benefits challenging. This accounting branch needs specialized payroll services that document all transactions, remit pension contributions to the Canada Revenue Agency (CRA), and file taxes on time.
  • Billing Errors: Most residents pay for their LTC through insurance. Insurers have complex billing requirements, which make them prone to human error. Billing errors, such as wrong medical codes, billing for services outside insurance coverage, or incomplete patient demographic details, can result in delayed or denied claims. This lengthens the revenue cycle and increases LTC facilities’ working capital needs.
  • Bad Debts: Rising costs of care and longer patient stays increase outstanding balances, leading to bad debts. Patients may make partial payments for the services provided. But the pending bills and claims could increase accounts receivable, leading to cash shortages.
  • Documentation: LTC facilities are tightly regulated and must strictly follow regulations governing patient record privacy and the maintenance of financial documents for claims. Any data leak could lead to penalties and damage reputation. They must also comply with business licensing regulations, as non-compliance could result in revocation of the license.

How Can an Accounting Firm Help

An accounting firm specializing in long-term care facilities can help you adopt best accounting practices and set up a financial system to address the above challenges.

1. Detailed Record-Keeping: An accounting firm is well versed with record keeping requirements. They can help you clean up your records and set a system to track financial transactions and maintain detailed medical records for patient billing.

2. Compliance with Regulatory Standards: Certified accountants are updated on the changing compliance procedures. They can help you comply with various regulatory standards related to healthcare accounting.

3. Integrating Specialized Accounting Software for Long-Term Care: An accounting firm helps you choose specialized accounting software for your business needs and integrate it into your system. The firm will tailor the software to your billing policies and payroll requirements, and adjust settings to generate the necessary reports. The right accounting software can:

  • Integrate with electronic health records to automatically populate clinical and demographic data in claims and invoices.
  • Minimize data entry errors and ensure claims are complete with no mandatory fields left blank, thereby reducing instances of claims denial.
  • Provide payment tracking and notification to identify pending payments and address them immediately before they balloon.
  • Automate tracking of work hours, payroll, and benefits processing,
  • Schedule shifts smartly to minimize overtime and allocate staff optimally.
  • Track digital compliance for audits and reporting.
  • Provide real-time access to financial data and key performance indicators (KPIs).

The long-term care accounting software may not automatically fix your finances, but it will automate administrative work, improve compliance, and provide real-time data to make informed decisions.

4. Training Staff: Accounting software can automate many things, but still requires human input. The accounting firm will train staff to use the software, update them on relevant regulatory and compliance requirements, and enhance their communication skills for negotiating with payers and care recipients regarding bill payments.

5. Review and Update Financial Policies: Every long-term care facility has different financial challenges, and at the core are outdated or ineffective financial policies. For instance, if your biggest challenge is delayed payments, you can review your accounts receivable policy. The policy will state the obligations of each party and provide detailed instructions on handling bad debts, including the escalation process and timelines for how an unpaid bill moves from stage 1 to stage 2.

An accounting firm will rewrite policies and review them regularly to assess their effectiveness and drawbacks, and update them accordingly. Such regular reviews will help flag problematic accounts and address issues before they hurt your cash flow.

5. Predictive Analytics to Support Decision Making: The accounting firm will use advanced data analytics capabilities of the accounting software to track KPIs like occupancy rates, cost per resident, and staffing efficiency. These analytics can be used to monitor the effectiveness of accounting policies, prepare a realistic budget, allocate resources, and determine an efficient patient mix.

6. Manage Cash Flow: The accountant will use real-time data to understand working capital needs, flag blocked cash, and upcoming operating expenses. They will forecast cash flow needs and determine an adequate cash reserve. The accountant can also help reduce bad debts by discussing payment terms with residents in advance and providing a clear estimate of out-of-pocket costs not covered by insurance.

Outsourcing your accounting to a professional firm can help your facility improve its operations and finances.

Contact Glenn Graydon Wright LLP in Oakville to Help You with Specialized Accounting Needs

Talk to a professional accountant to help you set up your accounting system and address the challenges specific to your facility. At Glenn Graydon Wright LLP, our accountants and bookkeepers can provide services such as preparing financial statements, integrating accounting software, and analyzing financial data. To learn more about how Glenn Graydon Wright LLP can provide you with the best accounting and bookkeeping services, contact us today at 905-845-6633 or connect with us online to schedule an initial consultation.