The short answer: what a monthly care home fee should cover
A monthly care home accounting fee should buy you four workstreams, each run to a date rather than "when we get to it": payroll and pensions, resident and funder invoicing with credit control, monthly management accounts, and the quiet running of year end and corporation tax so nothing is left to the last week. If a proposal describes those in general terms but will not say who prepares each one, who approves it, and by which working day of the month it arrives, you are buying a promise rather than a service.
The instinct is to compare quotes on price. The more useful comparison is the specification behind the price. Two homes can pay the same monthly fee and get very different things, because one accountant is filing the statutory accounts once a year and calling that a service, while the other is running the pay run, chasing the council and the integrated care board for what they owe, and handing the owner management accounts by the tenth of each month. For the deeper view of what the recurring work involves, our care home accountants page sets out the full picture.
This guide is written by LOYALS, a King's Cross firm of accountants and business consultants that runs monthly finance for care homes across London, so the framing throughout is the decision an owner actually has to make when choosing a package, not a sales list.
What should a care home accountant actually do each month?
Strip away the jargon and a monthly care home service is four jobs that repeat. Payroll runs on a fortnightly or monthly cycle and has to reach HMRC on time. Invoicing turns occupied beds and funded hours into money owed, then chases it. Reporting turns the bookkeeping into numbers the owner can act on. And year end sits underneath all of it, fed month by month so the statutory accounts and corporation tax are a formality rather than a scramble.
Those four are the spine of the engagement. What separates a real service from a filing habit is the detail inside each one. A strong proposal will, for example, name the working day the management accounts land, confirm that the payroll submission goes to HMRC on or before each payday, and say who reconciles what the funders actually paid against what was invoiced. Our management accounts service is built around exactly those named deliverables, because a care home runs on cash timing far more than on the once a year accounts.
Here is how the monthly work breaks down, with the responsibility against each line so you can mark up a proposal as you read it.
A monthly care home service, line by line, and who should own each part:
| Monthly deliverable | Accountant prepares | Owner approves | Typical timing |
|---|---|---|---|
| Payroll and pension assessment | Pay run, submission, payslips | Hours and pay changes | Each payday |
| Resident and funder invoicing | Invoices and statements | Occupancy and fee changes | Early in the month |
| Funder reconciliation and credit control | Remittance matching, chasing | Disputes to escalate | Fortnightly |
| Bookkeeping and bank reconciliation | Postings, bank match | Unusual items flagged | Weekly or monthly |
| Management accounts | P and L, cash, occupancy | Read and act | By an agreed working day |
| Year end and corporation tax | Accounts, return, filing | Sign off | Prepared through the year |
What does the monthly fee actually pay for?
Owners often ask why a monthly care home fee is what it is, when the annual accounts look like a once a year job. The answer is that the accounts are the smallest part. Most of the fee pays for the recurring work: the bookkeeping and VAT reviews that keep the records clean, the payroll that cannot slip, and the monthly reporting that tells you whether the home is making money this month, not next spring. The year end is real work, but spread across the year it is a slice of the cost, not the bulk of it.
Read the breakdown and the point lands: you are paying for the months, not the year. That is why a fee that looks higher than a once a year accountant's bill is often cheaper per unit of actual work, because it includes the pay run, the funder chasing and the monthly numbers that the cheap quote leaves you to do yourself or lose. The honest position is that a monthly service earns its fee when it removes real work and real risk from the office, and does not when it is a statutory filing dressed up as a retainer.
What is included, and what is commissioned separately?
A good monthly fee is predictable because it has a clear edge. The recurring work sits inside it, the approvals sit with you, and the one off or transactional work is quoted separately when it comes up. That is not a way of nickel and diming you, it is what keeps the monthly number fixed for twelve months instead of drifting every time something unusual happens.
What counts as separate is usually anything that is a project rather than a cycle. A statutory audit, if your group is large enough to need one, is a defined piece of work with its own scope. So is due diligence when you buy or sell a home, a finance pack for a lender or for a CQC registration, a response to an HMRC enquiry, or a one off structure and tax review. Spelling those out before you sign means the monthly fee stays the monthly fee, and the extras arrive as a quote you can say yes or no to, not as a surprise on the invoice.
The table below is the checklist worth keeping beside any proposal.
What should sit inside the monthly fee, and what is normally a separate quote:
| Inside the monthly fee | Commissioned separately |
|---|---|
| Bookkeeping and bank reconciliation | Statutory audit where the group needs one |
| Payroll, pensions and submissions | Buying or selling a home, due diligence |
| Resident and funder invoicing, credit control | Lender or CQC registration finance pack |
| VAT return where registered | HMRC enquiry or compliance check response |
| Monthly management accounts | Structure and tax review |
| Year end accounts and corporation tax | Backlog clean up before go live |
Payroll, pensions and funder invoicing: who owns what?
Payroll is where a vague service costs you money fast, because the deadlines are unforgiving. Carers are frequently paid fortnightly, and a Full Payment Submission has to reach HMRC on or before each payday. A monthly service has to name who runs that pay run, who files the submission, who assesses pensions for new starters, and who corrects an error before the next payday rather than letting it roll. "We do payroll" is not a specification; "we run the fortnightly pay run, file the FPS on or before payday, and handle auto enrolment and corrections" is.
Funder invoicing is the other half of the cash story, and the part most generic accountants leave alone. A care home is paid by residents, by local authorities and often by an integrated care board, each on its own cycle and its own remittance format. The real work is not raising the invoice, it is reconciling what the funder actually paid against what you billed, and chasing the gap. This is the operator level point most proposals skip: if the accountant prepares the invoices but nobody owns the variance between funded beds or hours and what was paid, funding leakage can run for months before anyone notices. Make reconciliation and credit control an explicit, owned line, not an assumed one.
Underneath both is record keeping. A company has to keep its accounting records for six years from the end of the financial year they relate to, so a monthly service should be filing and storing the payroll and invoicing evidence as it goes, not reassembling it when HMRC or a buyer asks.
VAT, exempt income and the care home trap in a monthly service
Most care home income is exempt from VAT, because welfare care provided by a CQC registered provider is a state regulated welfare service that is exempt. That is why many homes are not VAT registered at all, and why a monthly service often has no VAT return to file. The trap is assuming that settles the question for good.
Two things can change it. First, exempt income means you generally cannot reclaim the VAT on your costs, so a refurbishment or a big equipment purchase carries its VAT as a real cost, which the monthly numbers should show rather than hide. Second, if the home starts earning taxable income alongside the care, such as private extras, room hire or ancillary trading, it can cross into VAT registration and into partial exemption, where only some of the input VAT is recoverable. A monthly service worth its fee is watching for that line being crossed and telling you before it becomes a problem. A generic bookkeeping quote usually stays silent on it, and the first the owner hears is a registration penalty.
None of this means every home needs a VAT specialist on the monthly fee. It means the specification should say, in one line, that the service monitors the VAT position and flags any move toward registration, so the decision is made deliberately rather than discovered late.
Here is how the three common ways of buying care home accounting actually compare:
| What you need each month | DIY / in house | Generic accountant | LOYALS care specialist |
|---|---|---|---|
| Named delivery day for management accounts | ✗ Ad hoc | ● If asked | ✓ Agreed in writing |
| Payroll filed on or before every payday | ● Risky in house | ● Often an add on | ✓ In the service |
| Funder reconciliation and credit control owned | ✗ | ✗ Not their job | ✓ Explicit line |
| VAT position monitored for the exempt trap | ✗ | ● | ✓ Flagged early |
| Open Mon to Sat for a quick question | ✗ | ✗ Mon to Fri 9 to 5 | ✓ 10am to 7pm Mon to Sat |
| Fixed monthly fee, no surprise invoices | ✓ | ● Hourly common | ✓ Fixed monthly |
This is why care home owners move from a once a year filing to a specialist who runs the monthly cycle and owns the funder cash.
Appointment and the first reporting cycle
When you appoint a new accountant, the work does not start the next morning. The appointment month is about clearance and access, and the first full set of monthly numbers normally lands in the second month, once a clean period has been recorded. What matters is that no payday is missed in the handover, which means the first live pay run is protected from day one even while the records transfer.
Here is the realistic sequence, and the one date worth fixing before you sign is the target working day for the first management accounts.
A realistic appointment and first reporting cycle for a care home:
| Stage | What happens | When |
|---|---|---|
| Appointment | Engagement signed, professional clearance to the old accountant | Week 1 |
| HMRC authority | Agent authorisation for PAYE and corporation tax | Weeks 1 to 2 |
| Records transfer | Payroll, bookkeeping and funder data handed over | Weeks 1 to 3 |
| First live payroll | Pay run protected so no payday slips | Next payday |
| First management accounts | First clean monthly pack delivered | Month 2, agreed day |
| Year end on track | Statutory accounts due nine months after year end | Fed through the year |
That last line is worth holding onto. A private company has to file its annual accounts with Companies House nine months after the financial year ends, and pay corporation tax nine months and one day after the period ends, with the tax return itself due twelve months after. A monthly service that feeds the year end as it goes turns those deadlines into a sign off rather than a panic, which is a quiet benefit owners only notice when they have lived through the alternative.
If you run a home or a small group and want the recurring numbers, payroll and funder cash handled by a team that works only with care and health businesses, our care home accountants page sets out how the monthly service is built, from a single home to a multi site group.
What this means for you: specifying the monthly service
If you are choosing a recurring accountant for your home, the practical move is to make the proposal prove itself before you compare prices.
- Ask for a one page specification. Every monthly deliverable, who prepares it, who approves it, and the working day it lands. If a firm will not write that down, that is your answer.
- Make funder reconciliation an explicit line. Not "invoicing", but who matches the remittances and who chases the gap, because that is where care home cash leaks.
- Pin the payroll rule. Confirm the pay run frequency and that the submission is filed on or before each payday, with corrections handled before the next run.
- Separate the one offs. Agree in writing what is inside the fee and what is a separate quote, so the monthly number stays fixed for twelve months.
- Fix the first accounts date. Agree the target working day for the first management accounts before you sign, not after.
Done properly, a monthly care home service takes the finance work out of your office and hands you numbers you can run the home on, with the year end already under control. Done loosely, it is a once a year filing with a monthly invoice attached. LOYALS is a King's Cross firm of accountants and business consultants, and we run the monthly numbers, payroll and funder reconciliation for care homes across London, with every deliverable named and dated. Ask our management accounts team to agree a monthly care home service specification with you, so you know exactly what the fee covers before you commit.