Home care agency bookkeeping is where most agencies quietly lose money. In our work with agencies running 20 to 75 caregivers, the same 5 leaks show up again and again: unbilled visits, payroll errors, late tax deposits, unpaid travel time and wasted expenses.
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In short:
- Match what you billed each payer against what hit the bank, every month.
- Check caregiver pay rates, overtime and duplicate hours before payroll runs.
- Pay federal payroll tax deposits on time. Late deposits cost 2% to 15%.
- Pay travel time between client homes. It is work time under DOL rules.
- Review every subscription and vendor charge once a quarter.
Last updated November 10, 2026. Reviewed by Aryan Patel, founder of Global Books by Senvora, the home care practice of Senvora Group. Our team has worked hands on with US home care agencies for 2 years. The leaks below are real client cases, kept anonymous, and each one is a separate agency. Payroll tax facts come from irs.gov and pay rules from the US Department of Labor. We keep books and run payroll. Talk to your CPA or employment lawyer about your own situation.
Why do home care agencies leak money?
Home care runs on thin margins and messy data. Visits come from scheduling software, pay comes from timesheets, and money comes from several payers on different schedules. When nobody lines those three up each month, small gaps stay hidden for months.
Most owners we meet are sure their books are fine. The problem is not effort. It is that a regular bookkeeper records what happened and nobody checks what should have happened.
Leak 1: Are you billing for every visit you deliver?
Missed billing is the most common leak we find. A visit gets delivered but never billed, or billed and never paid, and nobody notices because the bank balance still looks normal.
One agency we worked with had $3,000 to $7,000 slip through over 3 to 6 months this way. The fix was a monthly match of visits delivered, claims billed and deposits received, payer by payer.
- Pull visits delivered from your scheduling system for the month.
- Pull claims billed for the same period.
- Match deposits from each payer against those claims.
- List every visit with no claim, and every claim with no payment, and chase both.
Leak 2: Is every caregiver paid the right amount?
Payroll errors are the most expensive leak we see. Wrong pay rates, overtime calculated on the wrong hours and duplicate shifts all add up when you pay caregivers every week.
One agency lost $7,000 to $15,000 over 6 to 12 months to payroll errors before we caught them. None of it was fraud. It was rates that never got updated and hours entered twice.
- Compare each caregiver rate in payroll against their offer letter or rate sheet.
- Check for the same shift entered twice from two sources.
- Review overtime hours line by line in any week over 40.
- Spot check 5 timesheets against the schedule every payroll.
Leak 3: Are payroll tax deposits going out on time?
Late federal tax deposits trigger the IRS failure to deposit penalty. Per irs.gov, it is 2% when a deposit is 1 to 5 days late, 5% at 6 to 15 days, and 10% after more than 15 days. It jumps to 15% if you still have not paid more than 10 days after an IRS notice.
We helped one owner avoid $2,000 to $5,000 in penalties by catching missed filings early. If you are not sure whether you deposit monthly or semiweekly, our payroll deposit schedule guide walks through the lookback rule.
Leak 4: Are you paying travel time between clients?
Under the DOL direct care rules, travel between client homes during the workday is work time and must be paid. Normal commuting to the first client and home from the last client generally does not count.
Agencies that pay only for visit hours can underpay caregivers without meaning to, and that builds a back pay risk. Track drive time between visits in your scheduling system so payroll can pick it up.
A note on overtime. The 2013 DOL rule says agencies must pay caregivers minimum wage and overtime. In July 2025 DOL proposed bringing back the companionship exemption for agencies and paused enforcement while it finishes the rule. State law can still require overtime, so keep paying it until your employment lawyer tells you otherwise.
Leak 5: What are you paying for that nobody uses?
Wasted expenses are the quietest leak. Old software seats, duplicate subscriptions and vendor charges that renew every month without anyone looking.
One agency was losing $2,000 to $5,000 a year this way. A quarterly review of every recurring charge on the card and bank statement fixed it in an afternoon.
How do you check all 5 leaks every month?
Put these on a monthly close checklist and give one person the job of signing it off:
- Billing vs deposits by payer, with a list of gaps to chase.
- Payroll review: rates, duplicates and overtime.
- Tax deposit dates confirmed and paid.
- Travel time captured in payroll.
- Recurring expenses reviewed each quarter.
If you want a second set of eyes, our team does this every month for home care agencies under Global Books by Senvora. You can also see all our bookkeeping services or read our guide to catching up books that are behind.
Frequently asked questions
What does a home care agency bookkeeper actually do?
They record every bill, deposit and payroll run, reconcile the bank each month, and match what you billed each payer against what landed in the bank. A good one also flags payroll errors and upcoming tax deposits before they turn into penalties.
How often should a home care agency reconcile billing and deposits?
Every month at least, payer by payer. Weekly is better if you run weekly payroll, because a missed claim gets harder to recover the longer it sits.
Do home care agencies have to pay caregivers for travel between clients?
Yes, under the DOL direct care rules, travel between client homes during the workday is work time and must be paid. Normal commuting to the first client and home from the last one generally is not.
What is the IRS penalty for late payroll tax deposits?
The IRS failure to deposit penalty is 2% if you are 1 to 5 days late, 5% at 6 to 15 days, and 10% after more than 15 days. It rises to 15% if you still have not paid more than 10 days after an IRS notice.
Is overtime still required for agency caregivers in 2026?
The 2013 DOL rule says agencies must pay minimum wage and overtime. DOL proposed bringing back the companionship exemption for agencies in July 2025 and paused enforcement while it finalizes the rule. State law can still require overtime, so confirm with your employment lawyer before changing pay.
Sources
- IRS: Failure to Deposit Penalty (irs.gov)
- IRS Publication 15, Employer’s Tax Guide (irs.gov)
- US Department of Labor: Domestic Service Final Rule FAQs (dol.gov)
- US Department of Labor: FLSA and direct care workers (dol.gov)
Want someone to check your agency’s numbers?
Global Books by Senvora does bookkeeping, weekly caregiver payroll and a monthly money leak report for US home care agencies with 20 to 75 caregivers. The first month is free. See how it works. Which of these 5 leaks worries you most?
