October 15, 2018
In an ideal operating world, revenue shortfalls would not exist. Year after year, a community would meet and/or exceed its revenue targets, keeping expenses in line and resulting in an amazing record of profits. This may hold true for many of us. For others, we may have experienced at one point or another, not having the picture painted above; we have experienced revenue shortfalls leading us to rely on expense management more heavily as a means to reduce loss.
I began my career in very challenged communities. From such experiences I have been able to grow and learn, forging a strength in expense control. Here are a few strategies I rely on from day to day:
- Lead With Transparency. Many directors are not specially trained in the world of accounting and/or financials. We don’t need everyone to have the aptitude of a strong executive director, but basic financial literacy is a must. The level of detail provided to your leadership team may vary based on the department and/or individual professional background.
- Drill Down. I’m sure we all check and double check our own personal finances. The same should apply in your professional setting. Personally, no dollar amount is too small for me to question. Knowing where the dollars are going will help you to understand your business that much more.
- Proper Accounting. It’s important to limit accruals and ensure timely accounts payable. Being able to account for expenses in the same operating month allows you to have a clearer picture of your financial standing month to month. Also, vendors are customers and timely payment is a form of good customer service.
- Be Flexible, Be Fluid. Being extremely rigid while trying to navigate variable expenses will add undue stress. Your direction may differ from week to week depending upon changes in the community.
The key takeaway is to never compromise quality of care as a result of trying to control the dollars. This may cost more in the long run in the areas of reputation, turnover, and resident satisfaction.
By Kadine Mitchell, CDAL
Brightview South River
Brightview Senior Living