FINANCE FOR
PRACTICE MANAGERS
Jenny Stone, ACA
Ramsay Brown and Partners
Ramsay House
18 Vera Avenue
London
N21 1RB
Tel: 202 8370 7705
E-mail: Jenny@ramsaybrown.co.uk
Finance Issues Practices are facing
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Majority of practices have not had an
inflation uplift since new contract
Profits are falling
Cashflow difficulties
Pressure from partners to maintain
profit/drawings
Funding for 2008/09
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For 2008/09 global sum increased by 2.7%
However if receive MPIG then any increase
in global sum will reduce MPIG correction
factor
Majority of practices have not had an
inflation uplift since new contract
Funding for extended hours recycled from
access and QOF
How to Increase Practice Profit
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Practices have seen a drop in profits for the
last two years
Profit = Income less Expenses
To increase profit need
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Increase income
Reduce expenses
Increasing Income
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Under nGMS very difficult to increase NHS income
Increase practice list
Practice Mergers/bidding for vacant practices
Aim to achieve maximum QOF points
Ensure max enhanced services income and taking up
new directed enhanced
Correctly claiming reimbursement of rent & rates,
vaccines
Ensure private fees charged and monies received
Using existing resources to generate new income
Other Income
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Need to consider benefit of new service
compared to cost
Examples of other income
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Teaching medical students
Becoming a training practice
Service charges for use of rooms
Nursing homes
Dr for Private Schools
Occupational health
PBC provider
Reducing Expenditure
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Review all areas for potential savings
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Cheaper suppliers for telephone, gas, electricity,
insurance
Keep an eye on stationery expenditure, costs can
escalate
More use of e-mail as opposed to printing and
posting
Review work carried out by staff
Review use of locums
Sharing resources with local practices
Setting budgets for all areas of expenses for year,
allows you to monitor and control expenses
Preparing Budgets
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Use of budgets
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Predication of the profitability of practice
Setting a budget allows you to monitor and control income
and expenses
Set partners monthly drawings
How to prepare a budget
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Start with last yrs income and expenses
Adjust for changes in income and expenses e.g. new
services, additional staff
Compare monthly budget with actual results
Budgets can be reviewed throughout the year and amended
Preparing Cash flow Forecasts
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Use of Cash flows
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Difference between cash coming in and cash
going out
Helps to identify period when may go overdrawn
How to Prepare a cash flow
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Include all income and expenses in months that
they occur
Include partners drawings, superannuation, tax (if
practice pay it) and loan repayments