Home Care Agencies
Caregiver wages are the biggest cost in this business, and the books need to show margin per client and keep worker classification clean. Hunter Green CPA keeps the numbers straight while you keep clients cared for.
The Business of Home Care
Home care is a labor business. Seventy to eighty percent of what an agency brings in goes right back out as caregiver wages. Add in scheduling, transportation, training, and the cost of turnover, and the margin that actually reaches the owner is thin. You can run a full schedule with dozens of clients and still wonder at the end of the month where the money went. The financials behind a home care agency are more complicated than they look from the outside.
Revenue comes from different sources depending on your market. Private-pay families pay you directly, often weekly or monthly. Long-term care insurance policies have their own billing and reimbursement timelines. Medicaid waiver programs in states that have them bring a different rate structure and payment schedule entirely. Each payer type has different collection timing, different documentation, and different margins. A client who pays out of pocket on Friday is a very different financial picture from a client covered by a waiver program that pays sixty days out.
Who This Covers
Who This Covers
Non-medical home care agencies, private-duty care agencies, companion care providers, personal care and homemaker services. If your business provides in-home assistance that is not clinical nursing or therapy, this is your world. Hunter Green CPA treats home care as a specialty focus, not a side category.
What Complicates It
What Complicates It
Hourly caregiver labor as the dominant cost. Overtime exposure when shifts run long or coverage gaps get filled. High turnover that means constant hiring and training expenses. Revenue arriving on different schedules depending on who is paying. And the ongoing question of worker classification that runs through the whole industry.
What We Handle
The books need to show what you are keeping, not just what you are billing. That means tracking labor costs by client and by caregiver-hour so you can see margin at the level where it matters. Some clients are profitable at your current rates and others are not. Some caregivers work efficiently and others need overtime to cover the same schedule. You need to see this in the numbers, not guess at it. We set up your books to show cost per hour, cost per client, and gross margin so you can actually run the business with real information. Full-service bookkeeping keeps everything current month to month.
On the tax side, home care agencies need accurate 1099 preparation for any legitimate contractors, clean payroll records for W-2 employees, and a structure that makes sense for the owner’s income. Many agency owners pay more in taxes than they need to because the business was set up without any planning. We handle the monthly bookkeeping, prepare the tax returns, and work on structure and timing with you throughout the year. The Bookkeeping and Tax Package bundles the books and the returns into one monthly price so nothing falls through the cracks.
Margin by Client and by Hour
Margin by Client and by Hour
Labor costs tracked against revenue at the client level. You see which engagements are worth keeping and which need repricing or release. Overtime gets visible before it becomes a pattern. The numbers support your decisions on pricing, staffing, and which clients to accept.
Payroll Visibility and Tax Work
Payroll Visibility and Tax Work
Caregiver wages, overtime, and payroll taxes visible in the books every month. Business and personal tax returns prepared by the same CPA who has been in your books all year. Any required 1099 filings handled accurately and on deadline. Structure reviewed so you keep more of what you earn.
What Goes Wrong
Most agency owners can tell you their total payroll for the month but not their margin per client or per caregiver-hour. The books show wages paid and revenue collected, but nothing is connected in a way that helps you make decisions. A client looks profitable because they pay $28 an hour and the caregiver earns $18. But once you account for overtime, scheduling gaps, drive time, and payroll taxes, the real margin might be half of what you thought. Without visibility at the right level, you are running busy but blind.
Worker classification is a known issue across this industry. Caregivers generally meet the criteria to be W-2 employees, but some agencies have treated them as 1099 contractors, sometimes without understanding the risk involved. The IRS and state labor departments look at this closely. Back taxes and penalties can be significant. We are not providing legal advice on classification, but we do make sure the books reflect your workers the way they are actually classified, and we will flag it if something looks inconsistent. Clean books start with correctly recorded labor.
Margin That Does Not Exist
Margin That Does Not Exist
Thinking a client is profitable when they are not. The gap between billed rate and caregiver wage looks good on paper until you allocate the true costs. Many agencies are quietly subsidizing unprofitable clients or running certain shifts at a loss without seeing it in the numbers.
Classification in the Books
Classification in the Books
If workers are classified as 1099 when they should be W-2, the books will reflect that structure. It matters for payroll taxes, for 1099 filings, and for how the business looks if anyone ever audits. Getting the records right from the start is easier than fixing them later.
What Changes
You know your margin by client and by caregiver-hour. You can see which engagements are worth keeping, which need repricing, and which are quietly costing you money. Overtime shows up in the numbers in time to manage it. When you add a new client or expand hours, you have real data to inform your rates. You stop guessing and start running the business on actual information that you can trust.
Your books support your structure correctly, with payroll recorded for W-2 employees and any legitimate contractors handled through proper 1099 filings. Tax returns are prepared by someone who knows home care and has been in your books all year. You have an entity structure that makes sense for your income, not whatever default was set up when you first incorporated. And you work with a firm that treats home care as a specialty. If this sounds like what you need, reach out and we can talk through your situation.
Pricing and Staffing Decisions
Pricing and Staffing Decisions
Real margin data to inform which clients to accept, what rates to charge, and when overtime is becoming a problem. Turnover costs visible so you can weigh hiring and retention spending. Business decisions made on numbers you understand and trust.
A Firm That Knows This Industry
A Firm That Knows This Industry
Home care is a specialty for Hunter Green CPA. We understand the labor economics, the payer mix, and the classification questions that come with this business. You are not explaining your industry from scratch or waiting for us to figure out how agencies work.
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Tell us about your business and what you need help with. We'll ask a few questions, explain how we can help, and tell you exactly what it will cost.