The short answer: what bookkeeping costs a care home
A UK care home typically pays from £349 a month for bookkeeping bundled with payroll and compliance for a single home of up to around 30 beds, from £699 a month once you pass 30 beds or run more than one home, and from £999 a month for a larger group with several registrations. Those are 2026/27 figures for a specialist care package, and they buy far more than someone keying invoices into software.
Standalone bookkeeping, meaning transaction entry and bank reconciliation with nothing attached, starts nearer £125 a month on a light plan and closer to £245 on a high-volume one. Very few care homes buy it that way. The reason is simple: in a home the bookkeeping is the raw material for the rota payroll and the occupancy figures, so splitting it off from those tends to create rework rather than save money.
LOYALS works as a specialist for care providers, so when we quote a home the number reflects the real workload behind the accounts. If you want the wider picture on running costs, our guide on accounting for healthcare and care providers sets out where a specialist earns the fee, and our bookkeeping service page shows what sits inside a monthly plan.
What is actually inside a care home's monthly bookkeeping fee
The monthly fee is not one job, it is five overlapping ones, and rota payroll is the largest slice. In a care home the bookkeeping has to feed weekly or four-weekly wages, reconcile fee income across three types of funder, and hold up to a Care Quality Commission (CQC) financial viability check, so the parts are never really separate. Here are the five jobs the fee actually pays for.
The five jobs inside a care home's monthly bookkeeping fee
Typical UK residential or nursing home, 2026/27
Bank and purchase ledger
Bank reconciliation plus the supplier ledger: food, agency staff, laundry, utilities and maintenance, coded and reconciled every month rather than at year end.
Rota payroll journals
Weekly or four-weekly wages built from the rota, with sleep-ins, waking nights and unsocial hours, tested against the £12.71 minimum wage on every run before it goes out.
Fee income across funders
Local authority, NHS Continuing Healthcare and private fees invoiced in each funder's format and reconciled line by line against residents and periods, not just against the bank.
Welfare VAT position
Care fees are VAT exempt, so you charge no VAT but cannot reclaim the VAT on your costs, and mixed supplies such as room hire are reviewed rather than assumed.
Occupancy-led management pack
Monthly figures showing occupied beds, average weekly fee, staff cost ratio and debtor days, ready for the bank and a CQC financial viability review.
Read down the list and one thing stands out: only the first job looks like traditional bookkeeping. The other four are where a care home quietly wins or loses money, which is why care bookkeeping and care payroll are almost always priced as one job. For the payroll side of that fee on its own, see our guide on what payroll costs for a care home.
What bookkeeping costs by care home size
The fee tracks bed count, transaction volume and how many funders you bill, so it climbs in steps rather than a straight line. A 20-bed home billing mostly private residents is a different job from a 50-bed home splitting income across two councils, an NHS team and self-funders. The chart below shows the typical monthly range at three common sizes.
One thing worth saying plainly: the jump from £349 to £699 is not the software costing more. It is the payroll headcount roughly doubling, a second or third funder remittance to reconcile, and a management pack that now has to hold up in a conversation with a lender or a commissioner. Larger groups with several registrations move toward £999 and beyond because the reconciliation and the consolidation multiply with every home. If you run more than one site, our guide on the best accountant for a multi-site care home group covers where the extra work sits.
Why care home bookkeeping costs more than a shop's books
Care home bookkeeping costs more because the compliance risk lives inside the numbers, not because there are more receipts. A shop reconciles a till and a handful of suppliers. A care home runs rota payroll with sleep-ins, splits income across councils, the NHS and private residents, and has to keep figures a CQC financial viability review will accept. Three of those carry real money risk if they go wrong.
The first is the sleep-in trap. Sleep-in and waking-night time has to be treated correctly and then tested against the National Living Wage on an averaged basis across the pay reference period, which rises to £12.71 an hour for those aged 21 and over from 6 April 2026, with employer National Insurance at 15 per cent on top. Get the averaging wrong across a year of rotas and you build a cumulative back-pay liability. HMRC treats that as an underpayment, adds a penalty of up to 200 per cent of the arrears, and can name the employer publicly, with enforcement moving to the new Fair Work Agency during 2026. Our deeper guide on sleep-in shifts and the minimum wage walks through exactly how the averaging works.
Second is VAT, and it works the opposite way round to most businesses. Care fees from a CQC-registered home are exempt welfare supplies, so you charge no VAT, but you also cannot reclaim the VAT on your costs. That makes the input VAT on a refurbishment, on food, or on agency staff a real cost rather than something you recover, which is why a refurb budget needs its VAT built in from the start. Mixed supplies such as room hire or day services can shift the position, so they get reviewed rather than assumed. We cover the detail in care home VAT, exempt or not, and HMRC's position is set out in its welfare services VAT notice 701/2.
Third is getting paid and knowing where you stand. Councils and the NHS pay on placements, often weeks in arrears, and their remittances rarely match your invoices line for line because of changed packages, disputed dates and Funded Nursing Care contributions, which sit at £267.68 a week per eligible resident from 1 April 2026. Reconciling that mismatch funder by funder is bookkeeping work a generalist skips. Underneath it, occupancy is the profit lever, because a home's costs are mostly fixed, so a couple of sustained empty beds can absorb the whole surplus before anyone costs it. Clean monthly figures are how you catch a void early and how you show the CQC that the home is financially well-led.
Here is how the three common approaches actually compare for a care home's books:
| What your home needs | DIY spreadsheet | Generic bookkeeper | LOYALS specialist |
|---|---|---|---|
| Tests sleep-in time against the £12.71 minimum wage | ✗ Not covered | ✗ Rarely | ✓ Every pay run |
| Handles the welfare VAT exemption correctly | ✗ | ● If asked | ✓ VAT Notice 701/2 |
| Reconciles LA, NHS and private remittances to invoices | ✗ | ● Bank only | ✓ Funder by funder |
| Reports occupancy, average fee and staff cost ratio | ✗ | ● P&L only | ✓ Monthly |
| Keeps CQC financial viability figures ready | ✗ | ✗ | ✓ Always current |
| Fixed monthly fee, open Mon to Sat | ✓ No fee | ● Hourly billing common | ✓ Fixed, 10am to 7pm |
This is why most care homes move from a general bookkeeper to a care specialist once sleep-in pay and funder billing get serious.
Spreadsheet, generic bookkeeper or specialist: which fits your home
The right choice depends on your bed count and how you are funded, not just on price. A brand-new home still filling its first beds can run a clean spreadsheet for a while. The moment you take a council or NHS contract, pass 20-odd beds, or start paying sleep-ins, the spreadsheet becomes the most expensive option because the risk it carries dwarfs any fee it saves.
A generic high-street bookkeeper solves the volume problem and will keep the bank reconciled and the accounts tidy. What they usually will not do is test sleep-in pay against the minimum wage, reconcile an NHS remittance against your invoiced placements, or produce a management pack a lender or the CQC will accept. Those gaps are invisible until a minimum wage check, a refinance or a funder query lands, which is exactly when they cost the most.
A specialist care bookkeeper folds all of it into one monthly fee, which is why the headline number looks higher than a generalist's quote and usually is not once you add the rota payroll, the VAT handling and the year-end back in. For most homes past the first few beds, one specialist fee replaces a bookkeeper, a payroll bureau and a year-end accountant, and the parts finally agree with each other. If you are weighing that against hiring someone in-house, we compare the two routes in in-house bookkeeper versus outsourced accountant for a care home.
When bookkeeping fees pay for themselves in a care home
The fee pays for itself the first time it stops a real loss, and in a care home those losses are large and predictable. Catching a sleep-in underpayment before HMRC does, spotting a short-paid council remittance, or seeing a void early enough to fill it will each cover a year of the monthly fee on its own. That is before you count the time an owner and registered manager get back to spend on care quality and occupancy.
Put a number on it. A £699-a-month package is £8,388 a year. A sleep-in minimum wage underpayment across a 40-staff home, with a penalty of up to 200 per cent of the arrears, runs comfortably into five figures once it is averaged back over several years of rotas. Two sustained empty beds at a typical self-funder fee of around £1,300 a week is more than £2,600 a week walking out of the door. One clean set of monthly figures that keeps you the right side of the minimum wage, catches the void, and keeps your CQC viability evidence ready is not a cost centre. It is cheap insurance on the two things that can actually close a care home: a payroll liability and a cashflow gap.
What this typically costs at LOYALS
- Single home, up to around 30 beds (bookkeeping, payroll, VAT and year-end): from £349/month
- 30 or more beds, or a multi-site group: from £699/month
- Larger group or multiple registrations: from £999/month
- Registration cashflow forecast (one-off, 3-year projections and narrative): from £999
- Standalone bookkeeping, light plan: from £125/month
All quotes issued in writing within 24 hours, after a 15-min scoping call so we price your actual home, not a guess. See full price list.
What to check before you choose a bookkeeper for your home
Before you sign with anyone, put five questions to them and judge the answers against your own rota and fee book. The right bookkeeper for a care home should not hesitate on any of these.
- How do you handle sleep-ins in payroll? If the answer does not mention treating the shift correctly and averaging against the £12.71 minimum wage across the pay reference period, keep looking.
- Do you know whether my care income is exempt for VAT, and what that does to my costs? They should explain that welfare care is exempt, not zero-rated, so the input VAT on your costs is not recoverable.
- How do you reconcile council and NHS remittances? The right answer is funder by funder against invoiced placements, not just against the bank balance.
- What occupancy figures do I get each month? You want occupied beds, average weekly fee and staff cost ratio, not just a profit figure once a year.
- Will my figures be ready for a CQC viability review or a lender? Current management accounts and a clean debtor position should be kept ready, not assembled in a panic.
Get clear answers on those five and the monthly fee becomes easy to judge, because you are comparing like for like rather than a bookkeeping-only quote against a full care package. You can check your home's position, and get a fixed quote for your actual beds and funder mix, in a free call with LOYALS.