The hidden costs of finance errors in social care

Over half (53%) of CFOs told us in our Care Trends Report 2025 that their finance employees spend 5 – 6 hours a month on average amending

These errors and manual corrections are clearly taking a significant amount of time away from care organisation’s other core priorities, and could well be bringing avoidable, hidden costs with them.

We’re exploring the hidden costs of finance errors in social care, where they can stem from, and ways care providers can reduce financial pressures in social care and see a return on investment from these strategies.

What are common finance mistakes a care provider can face?

Financial errors in social care can happen for several reasons:

• Human error

Mistakes in data input or calculations can lead to inaccurate records, confused budgets and can lead to costly corrections.

• Manual invoicing

A reliance on manual workflows increases the chance of errors, especially with invoicing in social care as they are often unique depending on funder requirements. Duplicate invoices, missing payments, or incorrect amounts can disrupt your cash flow.

• Complex payroll processes

Social care has unique demands, such as managing variable pay rates, shifts, and overtime. Missteps here can lead to payroll discrepancies that take time and effort to correct, leaving your hardworking teams frustrated.

• Lack of visibility

Insufficient oversight over your financial data can lead to delayed error detection and reactive rather than proactive decisions.

• Irregular budget management

Not regularly comparing budgeted expenses to actual spending makes it easy for discrepancies to go unnoticed.

• Inaccurate records

Incorrect or outdated data around expenses or revenues can distort your financial position, leaving you to make decisions without knowing the full picture.

What are the hidden costs of finance errors in social care?

• Paying for lost time

Your finance team can likely give you a list of tasks they could’ve completed had they not needed to focus on fixing errors or managing time-consuming processes. But do you know just how much that lost time is potentially costing your organisation? Let’s crunch the numbers:

Currently, the average salary for a Finance Assistant in the UK is around £24,000 per year. That would work out to £12.31 an hour for a typical 37.5 hour week. Say you have three people in your finance team, each spending five hours a month amending invoice discrepancies, that time correcting errors would cost you £2,215.80 a year.

And you can double this number if your team is also spending the same amount of time amending payroll discrepancies too.

• Operational inefficiency

You know just how much time financial processes can take, especially when we consider all the complexities that often come with invoicing and payroll in social care. But when your team is constantly amending discrepancies, it likely impacts the rest of the workflow. That’s because instead on focusing on next steps, they’re having to fix past mistakes and then play catch up with incoming needs.

Whether it’s painstakingly inputting data from one system into another, communication breakdowns slowing processes down or simply making mistakes because of human error, all this takes time to complete, let alone to correct if it’s wrong. And this reduced productivity can eventually lead to financial losses because you just can’t work to your full potential. Perhaps financial automation in social care could play a core role in helping care providers with their accounting.

• Missed opportunities

Finance errors in social care are more than just a bookkeeping headache. The impact can ripple throughout your organisation, limiting your ability to grow, invest, and make informed decisions. For example, inaccurate financial data can result in missed opportunities for growth, investment, or strategic decision-making. And late or missed payments can then incur late fees, penalties, or even damage credit scores.

Incorrectly recorded expenses or revenues can lead to overpaying your suppliers or undercharging your funders, directly impacting your bottom line. Plus, a misstep in your payroll process could mean delayed wages for your employees. While you may resolve the issue eventually, the shortfall in morale and trust can linger, increasing turnover and creating extra recruitment costs too.

• Compliance challenges

You’ll know that recently the National Insurance Contributions have been introduced. Combined with the rise in the National Living Wage, many care providers are now faced with compounded financial strain and additional complexities on top of already tight budgets. This could be putting additional pressures on both your organisation and your busy teams to ensure accuracy.

Delays to processing your income and expenditure may even result in disruption to your service, potentially putting your organisation in position where you’re unable to effectively provide the compliant, high-quality and timely care you work hard to deliver.

How to mitigate finance errors and prioritise care quality

Addressing these hidden costs starts with reviewing your processes and investing in tools that advance efficiency and accuracy. Here’s how you can take actionable steps:

1. Implement robust accounting systems

Manually managing your finances is likely causing more headaches and errors than you realise. But switching to accounting software that’s built for social care can completely change your teams day-to-day. Robust financial management tools do the heavy lifting, automating tasks like invoicing and reporting.

And the ROI of automation in social care finance. Instead of spending hours trying to correct mistakes, they can focus on tasks that have a real impact on your organisation. Plus, you could even save money by reducing costly errors and skipping the admin inefficiencies that drain resources. 

2. Establish clear internal controls

Mistakes can often sneak in when internal systems lack structure. That’s where clear controls come in. Put measures in place to double-check data and validate transactions. Whether that’s automating approval workflows or simply establishing new verification steps, these controls stop errors before they even begin.

Time is one of the most valuable resources in the social care sector. Your employees should be focusing on the things that matter most, like enabling quality care—not on sifting through spreadsheets. Having clear internal controls means your finance team will spend less time fiddling with numbers and more time on meaningful tasks that matter to your organisation’s goals. And fewer errors not only reduce stress but also protect your bottom line and keep your reputation intact.

3. Regularly review financial data

Checking in on your financial data regularly might sound like common sense, but it’s a step often overlooked when workloads get heavy. However, spotting issues early through periodic audits or reconciliations can have a significant impact.

Frequent audits and reconciliations are critical in identifying discrepancies before they snowball into larger issues. Periodic reviews build confidence in financial reporting accuracy and with real-time insights served up at your fingertips, you’ll have a crystal-clear view of your financial health, helping you make smarter decisions right when you need to.

How can software help care providers manage these hidden costs and see ROI?

At OneAdvanced, we pride ourselves on developing sector-focused software that meets the specific needs of your industry. Our cloud-based Financial Management software designed by finance people, for finance people, so your team can manage all accounting processes in one place. 

Plus, with our Procurement and Spend Management software, you can easily buy from approved suppliers in one place, tracking price changes and approval controls.

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See today just how financial management for social care providers could reshape how you manage your income and expenditure.