How much cash should a home care agency keep?

A non-medical home care agency pays caregivers weekly and bills clients for the hours delivered. Private-pay families often pay within a couple of weeks. Long-term care insurance and VA programs pay slower. The mix decides how much cash you need.

Payroll per run, all-in $ How often you run payroll Fixed bills per month (rent, loans, insurance, software) $ Days your customers take to pay, on average days Cash in the bank today $

Minimum to keep

Two payroll runs plus one month of fixed bills

Comfortable level

Covers costs while you wait for customers to pay, plus one month

Weeks your cash covers

If no customer paid you

The starting numbers are an example. Replace them with yours.

How cash moves in a home care agency

Caregiver wages are most of the cost and go out every week.
Private-pay clients pay faster than insurance-backed clients.
Overtime to cover a shift raises cost without raising the bill.
Losing one client with many weekly hours shows up in cash within two weeks.

Why the usual rule falls short

Two agencies each bill $130,000 a month. One is all private pay. The other bills half its hours to long-term care insurance that pays in 45 days. The second carries far more caregiver payroll before it gets paid.

How the calculator works

Result	Formula
Minimum to keep	2 × payroll per run + 1 month of fixed bills
Comfortable level	Monthly costs × (days to collect ÷ 30 + 1)
Weeks your cash covers	Cash ÷ weekly costs

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Also for home care owners, see the home care agency monthly financial report.