Staffing Shortages, a Looming Recession, and how Senior Living Communities are Leveraging Accounts Payable Automation
As we enter a new year, experts are still predicting that the U.S. could soon enter a recession. Financial downturn is challenging for any industry but could be especially troublesome for aging service organizations as it continues to battle impacts of the COVID-19 pandemic.
Data shows that The Great Recession significantly impacted aging services in 2008. The housing crisis forced many older Americans to postpone plans to move into senior housing communities until they could sell their homes1. As a result, occupancy rates flattened for an estimated 2.1 million senior housing beds.
Aging services is often considered recession proof–or at least recession resistant–but the current economic crisis, combined with overwhelming staffing shortages, could severely disrupt the field. Currently, most nursing homes and assisted living communities are facing a severe staffing crisis. In 2022, 87% of nursing homes experienced moderate or high staffing shortages, and 98% faced issues hiring new staff2. Also, 73% of nursing homes at that time were facing potential closures due to staffing shortages.
While there is no one way to fix severe staffing shortages and the looming threat of a recession, automating repetitive and time-consuming tasks is a good starting point for success. By automating AP, aging services organizations can achieve economic resilience during an economic downturn while overcoming additional challenges.
How can AP automation help during a recession?
Shorter Procure-to-Pay (P2P) cycle:
Manual, paper-based accounting processes are costly and time-consuming, making it challenging for finance departments to optimize operations and grow working capital. Cloud-based AP Automation solutions make it easy for facilities to achieve increased efficiency and profitability. Best-in-class finance automation software saves 80% of the time on invoice and payment processing while lowering invoice costs by 60% to 70% and payment processing costs by 80% to 90%.
Improved quality of life for residents:
With automation implemented, providers can now do more activities that will improve the quality of life of their residents. For example, social activities provide tremendous benefits for seniors by helping them build relationships among residents and caregivers, improve confidence levels, and build trust. Lastly, social activities are great for reducing stress and improving overall wellness3.
While audit season is stressful, best-in-class Payment Automation solutions can help you securely manage costly and time-consuming audit processes.
- ACH Rules Compliance Audit
This audit, required by the NACHA Operating Rules, states that all participating depository financial institutions, Third-Party Service Providers, and Third-Party Senders conduct a risk-based ACH Rules Compliance Audit each year.
- SOC 2
Developed by the Association of International Certified Professional Accountants (AICPA), this audit is specifically designed for service providers storing customer data in the cloud.
- The Payment Card Industry Data Security Standard (PCI DSS)
Launched in 2006, this a set of requirements intended to ensure that all companies that process, store, or transmit credit card information maintain a secure environment.
Top solutions have built-in compliance-enhancing functions, such as centralized record-keeping for audit purposes, critical to demonstrating The Office of Foreign Assets Control (OFAC) compliance.
Additionally, Invoice Automation helps with audits by providing your finance team with a fail-safe electronic paper trail. Once implemented, all invoices have an electronic record of approvals, changes, and additional notes so auditors can easily view the process from start to finish.
Enhanced visibility into cash flow:
Manual processes lack visibility into cash flow, which is critical during a recession. Real-time visibility into cash flow and corporate spending enables businesses to understand their short-term and long-term working capital needs, identify potential gaps and adjust as needed.
Leveraging new technology helps aging services communities brace for economic downturns and succeed in the future. Finance automation also creates longevity, which is critical as the senior population is expected to more than double in the next 40 years4. By automating AP, Aging services finance professionals can create efficiencies that drive facility improvement and create a better experience for residents.
To learn more about how Paymerang’s best-in-class Invoice and Payment Automation can help recession-proof your AP department, schedule a demo today.
“I wish we found out about Paymerang sooner. The automated system saves us time and money and the people are wonderful to work with!” – CFO, Harbor’s Edge Retirement Community.
1Reuters: Ripples from housing crisis slow senior living
2American Health Care Association and National Center for Assisted Living
3The Ashford Independent & Assisted Living: Why Social Activities for Seniors Improve Quality of Life at Assisted Living Communities
4Population Reference Bureau