The hour you bill is not the hour you pay
A caregiver's paid day is visits plus everything the schedule wraps around them, but only the visits produce revenue. Utilization, billable visit hours divided by total paid hours, is the ratio that decides whether an agency makes money, and it erodes quietly: short visits scattered across town, the paid drive time the routing creates, an afternoon gap nobody could fill. Even a cancelled visit is rarely free, because under the ESA's three-hour rule a caregiver who reports in and is sent home is generally owed at least three hours' pay.
So the first thing we build is margin per care hour: revenue per billable hour, less the fully loaded cost of every paid hour it took to deliver it, employer CPP, EI, WSIB and vacation pay included. Run monthly by program and by neighbourhood, it shows which work funds the office and which only looks busy. The inputs already exist in the scheduling and payroll records the agency keeps; the CFO work is joining them and holding a firm line on what counts as billable.
Contract work and private-pay grow differently
Once that number exists, the growth question stops being abstract, because the two ways an agency grows behave differently on almost every line that matters.
| What differs | Funded and contract work | Private-pay work |
|---|---|---|
| Who sets the rate | The funder or the contract | You do |
| How volume arrives | In blocks, when a contract is won | One family at a time, on reputation and referrals |
| Effect on the schedule | Fills calendars and densifies routes | Adds hours wherever the family lives, dense or not |
| Payment behaviour | Reliable, on the funder's cycle | Yours to collect; steadier on pre-authorized debit |
| HST on the invoice | Exempt | Exempt when bundled with funded care; purely private clients are taxable once registration is required |
| The wage side | Eligible funded hours carry Ontario's PSW wage enhancement through payroll | The pay rate is entirely your own decision |
Neither column wins outright. Contract blocks lift utilization by shortening the drives between visits; private-pay lifts the rate and answers to no procurement cycle. The mix is a decision, and the honest way to make it is to model the next contract bid and the private-pay pipeline against margin per care hour before committing caregivers to either.
Hiring ahead of revenue, on purpose
Care capacity is hired before it is billed. Recruiting, vulnerable-sector checks, orientation and shadow shifts are all paid while the new caregiver's calendar is still half empty, and a new contract ramps the same way: payroll from week one, full volume weeks later. Guaranteed-hours offers, increasingly what it takes to keep good PSWs, convert a variable cost into a fixed one. None of that is a reason not to grow; all of it is a number that belongs in the plan before the offer letters go out, and we put it there.
Turnover makes the ramp a recurring cost rather than a one-time one. Every caregiver who leaves takes her paid orientation hours with her and hands a schedule back to be rebuilt, so we track the cost of a departure beside the cost of a hire. Priced that way, retention spending, guaranteed hours included, is usually cheaper than the churn it prevents.
Cash that clears every pay run
Payroll leaves every two weeks whether the funder's remittance has arrived or not. The discipline is a rolling forecast that lines every upcoming pay run against expected receipts by payer, with receivables reviewed weekly rather than at month-end, so a slow remittance shows up as a warning instead of a crisis. When a ramp needs more than the bank balance, the answer is an operating line matched to the gap between pay runs and receipts. Walla Assaf, CPA worked in banking and corporate finance before founding the firm, and Business Financing Advisory prepares the margin and forecast file a lender will actually ask for.
The monthly rhythm, sized for an agency
As a Fractional CFO we work a few days a month, not a salary: margin per care hour and utilization by program, the contract and private-pay mix against plan, the rolling cash forecast, and a standing session with the owner before every bid, hiring wave or rate change. It runs best on the visit-driven books End-to-End Accounting keeps monthly. For agencies across Mississauga and the GTA, scope and fee are set out in writing after a free 15-minute discovery call.
