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Don't miss any payments

  • 20th November 2013

Don't miss any payments!

Over the past few months there has been a lot of commentary about how the demise of the PCTs has affected practice income, with specialist accountants estimating that 10% of income has been affected by this chaos. The chaos was to such an extent that earlier this month NHS England sets up working group to solve GP payment issues ( pulsetoday.co.uk/news). 

Every practice will want to ensure the relevant body is invoiced for services provided and the correct level of income is actually received in a timely manner. Therefore practices must establish fail-safe systems for recording work performed and collecting income from whoever commissions the work and the task of credit control is becoming increasingly important for medical practices. Here are my top tips.

1 Review your paperwork
Initially, all paperwork that is critical to the receipt of income, both internally generated and that received from or required by third parties needs to be reviewed and key information established:

- What tasks have to be done by a certain date?
- Who will do it?
- When will the practice be paid and by whom?

How long this takes will depend upon how many income streams a practice has - if a practice solely relies on its core GMS/PMS income then clearly this will not be an onerous task. Inversely, if there are many additional sources of income from outside appointments, medical student training, appraisals or revalidation, high levels of medico-legal reporting, or CCG involvement, this will be a larger task.

2 Create a 'calendar' of payment dates
Noting the key dates on a calendar will help to plan resources and ensure that there is sufficient staff and time to achieve the deadlines. Visually reviewing key dates and deadlines will enable you to discover possible 'bottlenecks' when too much has to be done at one particular time. You then have the opportunity to review and adjust internal deadlines to avoid last minute rushed submissions.

This can be a manual process or could be computerised so you receive alerts and notifications to help you keep on track. If there are sufficient employees, segregating these duties and giving certain individuals ownership over key tasks could prevent tasks from being missed. However, an element of training may be required and you will need the right staff for the right roles.

Deadlines include:

  • DES reporting and payment dates
  • CQRS data entry
  • invoice preparation for medicals and reports together with settlement dates for
    these invoices
  • PMS/GMS payment dates
  • superannuation certificate submissions
  • tax payment dates, where the practice pays partners' income tax liabilities
  • drugs/dispensing income receipt dates.

Administration staff with capacity could be used to assist the PM and spreading responsibility will prevent the creation of bottlenecks, thus making covering for holidays and sickness less problematic.

3 File invoices
Once an invoice has been raised, or data submitted directly, you need to ensure that the income is received. This could be as simple as keeping a file of unpaid invoices or submission documents and ensuring that they are paid, periodically chasing up any income not received.

The system will primarily depend upon the capabilities of the accounting system used by the practice, and in particular its ability to report on unpaid invoices. In addition the level of the PMs knowledge of any accounting software's capabilities will impact upon what is reported.  If 'off the shelf' packages are used (Sage or Iris, for example) then an investment in training could be money well spent.

The most basic system need only consist of a lever arch file containing the invoices raised, which are then placed into the paid filing system when settled. The file should be reviewed periodically to establish what should have been paid and follow up procedures implemented.

4 Plan for missing payments
Some work will require invoices to be raised at the onset, but others at more timely intervals or when the work is completed. These dates are also key, but could be monitored by someone entirely different to those managing the work deadlines, just be aware of the implications regarding staff sickness and holidays. What can you put in place to ensure tasks aren't overlooked or missed if someone is absent from work.

Finance requirements should be covered by the normal working capital requirements of the practice, and if it is felt that there may be delays in income receipt, a buffer or war chest should be created. 

We would not recommend the use of overdrafts, particularly unauthorised, as interest rates tend to be penal. If additional finance is required, capital introduced by the partners from a cash investment, or by means of reduced drawings, should be considered first, before looking for external funding via loans with a specified term.

5 Allow plenty of time to log and check payments
Attention to detail is vital so time must be allocated to ensuring you can complete the work required. Great care should be taken to check that the income agrees to what is expected as mistakes can and do happen. Technology can help and potentially reduce the manual hours required and mistakes to a certain extent, however there is no substitute for meticulous monitoring.

This means matching every £1 of income received by the practice against what is expected, with both positive and negative variances investigated. There is no point just looking at shortfalls of income, as if an overpayment is ignored and the funds spent, this can create problems if the third party identifies the error and requests a refund, not to mention this is actually theft!

Ultimate responsibility rests with the finance partner but this will normally be delegated, not abdicated, to the PM or finance officer if appointed. It is not the accountants' job to monitor daily transactions of the practice, though they may well identify errors when preparing the annual accounts if they understand how medical practice income is received.

Who writes this?

Keith Taylor FCA

Keith Taylor FCA

Director of Medical Services
Find out more about Keith
  • Very smooth changeover to BW, with good communication at all times. Very efficient in the production of the accounts (as promised) and the Partners are delighted with the advice received to date.

    Paul Atkinson, Practice Manager
    Netherfield House Surgery, Northumberland
  • BW Medical Accountants have a good working knowledge of General Practice and are keenly aware of the challenges Practices face within the changing environment of the NHS.  Benfield Park have been very impressed by the way BW Medical continue to deliver the range of services they provide from Accounts to Tax and NHS Pension advice. 

    We have found Practice consultation and engagement from BW Medical specifically helpful to shape the future of the Practice.

    Jonathan McCutcheon, Practice Manager
    Benfield Park Medical Group, Newcastle
  • We had no hesitation in moving to BW Medical Accountants.  For any business your accountant is integral, and for us one of the most important factors to this relationship is to have a personal and trusting approach, which BW have undoubtedly achieved. 

    The service we receive and the interest they show in our practice assures us that they have a genuine interest in us and commitment to us.  More importantly they are always helpful and polite to answer even the dumbest of questions!  They give us confidence and reassurance knowing that they are always very up-to-date with all the numerous changes within general practice and we would have no hesitation in recommending them to other practices seeking a professional and personal accountancy service.

    Jackie Rotherham, Practice Manager
    The James Street Family Practice, Lincolnshire
  • We moved to BW Medical Accountants in 2013 and we are delighted that we have.  Having been in the same business for over 20 years it is important to have a relationship with the accountancy team but most importantly you need to have trust.  We made the decision to move our business to BW Medical Accountants and having worked with the Team especially Tina we are very satisfied.  Tina going through the accounts brought to our attention many things that I was not aware of in the past.  The first years' experience can only be described as excellent.

    Customer service is first and foremost with BW and this shines through as each and every one of them are approachable, helpful and most importantly understand and know the business.  General practice is complex and is going to get more complex in the coming years.  We need Accountants who truly understand our business. We as a practice and as individuals would certainly recommend BW Medical Accountants.

    Gloria Middleton, Managing Partner
    Westbourne Medical Group, Sunderland
  • We changed to BW Medical Accountants during this financial year and I would say we have just had the most transparent and understandable end of year meeting and the best planning advice I have ever had in 16 years of practice.

    Dr H Jervis, Partner
    Temple Sowerby Medical Practice, Cumbria

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