Home care agency bookkeeping: follow the visit, allocate the payroll

The visit pipeline: scheduled, verified, billed, paid

An agency's revenue leak is almost never theft — it is verified visits that never got billed and billed visits that never got chased. Scheduling platforms like AlayaCare hold the truth about what was delivered: clock-ins, visit verification, missed and shortened calls. We reconcile that record outward every month — verified visits to billing runs, billing runs to invoices and funder files, invoices to deposits — so the gap between hours worked and hours paid-for has a name each month instead of surfacing at year-end.

Adjustments get posted visibly: a cancelled visit that still triggered travel, a funder-rejected line, a shortened call billed at the shorter duration. Silent write-offs are how a busy agency shrinks without noticing.

Payer mix decides cash timing — and tax character

Most agencies bill some mix of government programs, families, veterans, and insurers, and each stream pays on its own cycle with its own tax treatment. Nursing services are HST-exempt everywhere; homemaking and personal-support services are generally exempt when publicly funded or subsidized, and can be taxable when purely private. Mapping each service line by payer is real bookkeeping work, not a default setting:

Per-payer revenue accounts also expose the strategic number: your effective rate per delivered hour by funder, before you sign the next contract renewal.

Mileage is real money — pay it the non-taxable way

Caregivers drive between clients all day, and how you compensate that determines whether CRA sees a reimbursement or income. A per-kilometre allowance at CRA's reasonable rates is non-taxable to the caregiver and deductible to the agency; a flat monthly car allowance is a taxable benefit that belongs on the T4. We tie kilometre claims to the visit schedule — the routes are already in the scheduling data — so the reimbursement ledger defends itself.

Travel time between clients is working time under Ontario's ESA, which makes it a payroll cost, not a mileage line. Books that conflate the two understate labour cost per visit and set up minimum-wage compliance problems in the same stroke.

Allocate payroll or fly blind on contract margin

When wages, premiums, and travel are 70 to 80 percent of costs, an unallocated payroll line makes every contract look the same. We code payroll from the scheduling system to programs and contracts — wages, employer CPP and EI, WSIB, and travel — so each funder shows a fully loaded cost per delivered hour against its billing rate. Ontario's permanent PSW wage enhancement on publicly funded visits gets its own tracking: received from the funder, passed through in pay, and reportable as such, never blended into base wages.

The same allocation powers the growth decisions — which contracts fund their own overtime, and what a new service line must bill to clear its loaded cost. Payroll mechanics for a mobile workforce have their own page: see our home care agency payroll guide.

The monthly close for a payroll-heavy agency

Month-end delivers verified-versus-billed visit counts, revenue and receivables by payer, mileage and travel-time cost, and margin by contract — the numbers that decide whether to take the next block of referrals. Year-end flows into the T2 cleanly because the allocations already exist. Cross-border exposure in this niche is thin and we say so; the honest version lives in our cross-border tax page for home care agencies, and our bookkeeping services page shows the full monthly close.