Nursing home operator cuts budgeting time 50%, gains breakthrough budget vs. Actuals insights

West Harbor Healthcare, an early-stage company that runs five nursing homes in Northern California, got by with basic budget vs. actuals comparisons for a few years as the company grew after its founding in 2016. A few years was enough. West Harbor upgraded from Excel-based budgeting to Sage Intacct Budgeting and Planning in 2020, gaining vital insights to monitor spending, optimize operations, and staff a workforce that’s reached about 650 employees today. “We could run a P&L report, look at an Excel budget, type in some numbers, and figure out an over/under number — but that’s about it,” recalls Mette O’Connor, controller at the Carlsbad, Calif.-based company. That’s changed with Sage Intacct Budgeting and Planning. Now, West Harbor can easily report on labor, overtime, food costs, nursing supplies, and other expenses in line-item detail across departments, as outlined in our new customer success story. “If we spot an issue in overtime or food costs by analyzing budget vs. actuals, we’re able to make changes in real time before a problem gets out of hand,” said O’Connor, who joined West Harbor in 2018. “The biggest thing is having data at our fingertips to make informed decisions without looking at 20 different reports.”

A ‘Phenomenal’ Improvement in Productivity and Decision Making

Vastly improved budget vs. actuals reporting is one of many benefits West Harbor is realizing with Sage Intacct Budgeting and Planning, along with the core Sage Intacct Financial Management module (replacing QuickBooks). West Harbor, which also runs a separate business entity providing physical, occupational, and speech therapy to facility residents and is rolling out new home health and hospice services, has:

• Reduced budget creation time by 50%, from three months to six weeks
• Improved collaboration between finance and nursing home administrators
• Eliminated up 40 hours a week of manual AP and payroll work
• Cut its monthly close time from 30 to 10 days
• Avoided the cost of three additional staff needed if it remained on Excel and QuickBooks

“We went from limping along in our previous environment to being a fast-paced, highly automated finance department with Sage Intacct for both budgeting and accounting,” O’Connor said. “Having these powerful tools in place has been phenomenal in improving our productivity and ability to make better decisions.”

Scenario Modeling Drives Automated Revenue Calculations

Building the 2021 budget in her first use of Sage Intacct Budgeting and Planning, O’Connor saw a big efficiency gain in using scenario modeling capabilities to calculate revenue by patient days, a metric that accounts for income and expenses for each day a patient spends in a facility. “That saved me a tremendous amount of time because I used to have to calculate it all manually — for example, 21 patients per day, and the daily rate all by different payer sources,” O’Connor said. “Now I can just put actual patient days into a grid I built in Sage Intacct Budgeting and Planning, and revenue calculates automatically from that.” The patient days metric is core to West Harbor’s reporting, which is accessible to nursing home administrators as well as the company’s CEO and director of operations. That’s improving collaboration between finance and operations. “Our facility administrators are chomping at the bit to get their final numbers every month,” O’Connor said. “They’re learning more about finance and financials because they can run Sage Intacct reports themselves. They find it easy and like it very much.” Insights gained aren’t just financial — facility administrators are also identifying areas for improvement in services. Plus, O’Connor is no longer spending hours producing ad hoc Excel reports based on specific requests from the operations side.

Automation Supports a Lean Finance Team and Continued Growth

West Harbor selected Sage Intacct for both accounting and budgeting in 2019 after a look at Oracle NetSuite. A key appeal was native integration between Sage Intacct Financial Management and Sage Intacct Budgeting and Planning for a unified, cloud-based solution. “I wanted a one-stop shop so I wouldn’t be using different software for budgeting and different software for accounting,” O’Connor said. The decision is paying off as West Harbor pursues a strategic goal of doubling in size in several years through further acquisitions. West Harbor runs a small three-person finance team, even after adding two new facilities after first going live on Sage Intacct for accounting. O’Connor believes the company would need a six-person finance team if it had remained on QuickBooks and Excel. “My goal is complete automation in every area possible so we can have a lean finance staff and take care of those people with good salaries and benefits,” O’Connor said. “As we continue to grow, we’re able to easily pull in new facilities and companies into a great framework that can grow along with us.” View our West Harbor Healthcare success story to learn more about how the company has transformed finance with the combined Sage Intacct solution for budgeting and accounting.