Eight finance questions every PCN manager should know

What is the vision for the network? Who is responsible and accountable for financial activities? – Can you answer these questions?

CREDIT: This is an edited version of an article that originally appeared on The Primary Care  Network Specialists

If you are a new PCN manager, clinical director, or a member of the network with financial responsibilities, this should help you understand the key questions you will need to know when it comes to the financial management of the network.

Here are the questions you should know:

• What is the vision for the network?
• What are the contractual requirements of the network?
• Do we have any underspend from the previous financial year?
• What is the forecasted spend for the year?
• What is the current cash balance in the network?
• What is the typical monthly expenditure?
• Who is responsible and accountable for financial activities?
• Do you understand your PCN spreadsheets/statements?

Every Clinical Director and PCN Manager should know; 

The vision for the network

This is key and will affect how the network views and manages its finances. Some networks will want to return as much money as possible to practices. Other networks are happy to invest in the network infrastructure.

It’s not unusual to experience some conflict here if the Clinical Director has a different ethos regarding the network finances to other members of the network.

The contractual requirements of the network

You will find the contractual requirements of the DES 23/24 here.

You may have other sources of income and deliverables attached to this.

In this area, Managers and Clinical Directors must understand what can and can’t be claimed under certain workstreams.

This is particularly important as you do not want to incur any clawback from your local Primary Care team due to incorrect claims.

Any underspend from the previous financial year and how this is to be spent

This is important as failing to spend income could result in tax implications and failure to secure certain funding streams moving forward.

This may also impact the affordability of certain reoccurring costs once the underspend has been utilised.

Any overspend from the previous financial year

Many networks overspend on their PCN Additional Roles Reimbursement Scheme budgets. While in most cases, this is great, you need to keep track of this as you may be liable for unforeseen employment costs moving forwards.

The forecasted spending for the year

To give the network a good overview of how much underspend may occur or what further resources are required.

The cash balance in the network, either monthly or quarterly

In most organisations, cash is king. Networks will need to ensure and agree on a monthly float to pay for your expenses.

An overview of the expenditure

This will typically include:

• Salaries
• IT subscriptions
• Payments to practices eg. Extended Access
• Services commissioned by the network

Who is responsible and accountable for financial activities?

The RACI model, a project management tool, can be used to support the financial management of your PCN.

In this context, the RACI acronym stands for “Responsible, Accountable, Consulted, and Informed.”

• The responsibility component helps to identify who is responsible for financial tasks within the network.

This would typically include tasks assigned to a PCN Manager or Financial

Lead managing the day-to-day finances.

• The accountable party typically has ultimate responsibility for the network’s finances. This is typically the PCN Clinical Director.
• The consulted party provides input and advice – This is typically the PCN Board and your accountant. (But not always. Remember, this is just a guide).
• The informed party is kept up-to-date on progress. This would typically include practices within your network.

Using the RACI model, you can help to ensure that everyone understands their role in financial management and you can help to prevent misunderstandings and errors.

Reading your PCN statement

It is recommended that you take the time to understand your PCN spreadsheets /statements.

With many PCNs now responsible for budgets for seven figure budgets, a spreadsheet containing these amounts of figures can be daunting.
If your spreadsheet is too complex, you will likely;

• Make mistakes
• Want to retreat from managing this aspect of the network
• Won’t trust the financial decisions and options being made or blindly trust the financial decisions and options being made

Try to keep things as simple as possible and start using online tools like Xero to help you manage your money.