How do you manage clients' finances?

Maintaining client funds within an institution can be a complicated business. First, separate accounts must be ensured so that the organisation's money does not co-mingle with the client's. Thorough management of client funds is therefore a must in the healthcare sector.
At the same time, you easily want to give clients the freedom to participate financially in society. A personal debit card with a set budget offers a solution here.
There are still many questions surrounding the management of client funds. In the past, due to the bankruptcy of a healthcare institution, there have been lost custody and dressing fees of clients because these funds were in a bank account held by the healthcare provider. In addition, many institutions still work with cash.
This not only creates administrative pressure for maintaining cash books, but is also very susceptible to fraud.
Since January 2014, therefore, the so-called ‘Curatorship, protective guardianship and mentoring amendment act’ came into force, which aims to counter this.

Client funds and budget management

Before we go further into setting up client funds management: what exactly are client funds?
A client may have all kinds of income sources such as benefits, social allowances, wages or, for example, a state pension.
The amount of these amounts may vary from one client to another. From this income, the client pays fixed expenses such as housing contributions or individual care costs.
A separate amount is often set aside within these client funds for daily expenses, also known as living allowance. It is like pocket money for the client.
When a client is unable to make decisions for himself or herself, or finds it difficult to handle money, a social worker can apply for budget management. An administrator is then appointed to manage the budget or any debts. This can prevent a person from getting into further trouble.
Budget management, also known as income management, ensures that all fixed expenses are paid regularly. After that, the remaining client money is made available to the client by the budget coach. The client can then dispose of this himself. The budget plan therefore determines how much living expenses the client receives.
A budget is often spent per day, week or month. It is a predetermined budget with which, for example, daily groceries are paid for. Clients thus continue to participate in society and learn to cope with small amounts of money.

The current modus operandi of client money management

Currently, many institutions have not yet found the right way to make clients dispose of their own living budget.
They often still work simply with cash, taken from the care location's petty cash. Clients are then given €40 per week, for example, from which they buy groceries.
Administratively, staff and client expenses then quickly get mixed up, which is difficult for the finance department to keep track of.
When an organisation does opt for a cashless working method comes with a quick other problem. This is because, as an organisation, you often cannot apply to a bank for bank cards for people who are not on its own payroll.
In practice, this does often happen. Thus, when a debit card “solution” is chosen, the client is given the bank card that is actually in the organisation's name.
This is far from an ideal situation.

Ensure legal certainty when managing client funds

There are several areas to consider when managing client funds. Namely, there are legal and practical issues, both of which require different approaches.
As a healthcare institution, what can you do to ensure financial security in the legal sphere?
Following some incidents in the healthcare sector, where client funds were lost due to bankruptcies, the government has clarified the rules for managing client funds.
An important rule of thumb is that the client's assets must be kept strictly separate from the care organisation's funds.
Many institutions choose to work with a management foundation so that management and supervision can be separated from their own organisation.
Any healthcare organisation offering client money management services will therefore want to discuss its practices in detail with its legal counsel and have them reviewed regularly.
This will ensure, that all necessary permissions for management and any required exemptions are organised in time.

A helping hand with client funds from SimpledCard

Besides the legal side, it appears that there are many practical issues involved in the distribution of client and living funds. The distribution of physical money involves many risks.
It also requires accurate administration, which quickly takes up a lot of time. Accounts must be kept of the client's income, the money provided daily, the cash books at the care location and the proper handling of change.
Only then can the staying credit of the individual client be determined at any time.
You can solve these practical problems with a new tool: prepaid client charge cards. The client money card is issued in the client's name and the management's finance department can recharge it with the daily free-spending budgets. So this payment card for clients brings many benefits.
❯ Understanding and controlling living expenses
This allows you to easily separate the clients' transaction statements from those of the care organisation. The management foundation can thus process changes in balances faster administratively.
Thus, not only do clients retain more control over their finances, but care organisation staff are also freed from extra work.
❯ Giving control back to the client
The cards are connected to one central system, which allows payments to be visible in real time via computer or mobile app. Clients get their own card and thus have insight into only their own expenses.
However, there is always the possibility of intervention by the budget coach. This creates much more autonomy for clients: they do small personal expenses themselves and thus participate in normal social life.

❯ Speed and security of client funds
Issuing cards is easy. There is an option to turn off ATM withdrawals and enter your own PIN.
SimpledCard also complies with the strictest European guidelines for data storage of personal data. All this ensures less risk of fraud and a greater sense of security for caregivers and clients.

The new approach to client money management in practice

A renewed way of working raises many questions. We have therefore explained below in handy steps what managing client funds can look like for an organisation.
We realise, that every organisation works differently and has different needs, so the final situation may therefore differ. This is just one of the many options SimpledCard offers.
1. Once client money management starts, the client is added to the management system. After that, a pass can be issued in the client's name.
2. A budget plan is drawn up in consultation, so that caregiver and client know how much can be spent per period. This amount, the living allowance, can then be deposited on the client money card.
3. Possibly, the patient can also pay small fixed expenses such as the phone bill with the card, but in practice we see that it is often only about daily groceries.
4. The SimpledCard debit card allows the client to dispose of the living expenses agreed in the budget per day, week or month. This is all easily set up in the system so that it is then automatically credited to the card periodically.
5. All payments can be viewed in real time. So there is clear insight into spending for the client and his or her mentor at all times. This overview therefore also shows how much can still be spent within a given period.
6. Transaction reports of clients are easily separated in this way. These reports are printed out per client and forwarded to, for example, the administrator.
The client money cards are suitable for many different care facilities, including nursing homes, assisted living groups, residential and care facilities for people with disabilities, housing and care facilities for people with social problems and/or addictions, psychiatric and psychological care facilities and reintegration agencies.
Wondering how to better organise the management of client funds within your organisation? And allow clients to keep track of their own finances? Get in touch and determine the right plan of action together with our financial experts.