It all adds up: can you answer these PM finance questions?

Many practice staff have unanswered questions or concerns when it comes to finances, Jonathan Finch, web content editor, First Practice Management, explains how you can gain the knowledge to answer these questions

In today’s ever-changing and ever-challenging primary care landscape, the job of practice manager has never been as pressured and multi-faceted. Whether it’s acting as HR adviser, administrator, finance expert, or negotiator, PMs don’t simply have to manage, they have to have strategy and vision. But a GP surgery is a business, and one that must be run in a fiscally sound and sustainable way. Financial matters for a GP surgery can be complex, costly and change often. Many practice staff have unanswered questions or concerns when it comes to finances; they also may not be used to working with large amounts of data or financial regulations. 

That’s why FPM Group’s Thornfields, in partnership with chartered accountant and healthcare specialist Phil Harnby of north-east firm Mitchells Grievson, devised a new and innovative series of interactive finance webinars, held throughout 2022. 

Ask yourself and your staff whether you can answer the following questions which many PMs have asked, and what you would do if any of these circumstances arose in your organisation.

End of year practice finances are a crucial time for those who have to report finances, and many practice managers have queries about how they can keep track of everything they need to do, and what the best tools are to do this. There are also questions over how and when VAT should be charged, as well as how to manage staff expenditures. Another hot topic at the moment is how the pension changes announced recently might affect practice managers. 

Also needing careful management is the issue of partnerships, and how practice managers can become partners. It’s often hard for PMs to reach parity with GP partners, but there are ways of achieving a fair arrangement. Other questions include how to move from a fixed share to a variable partnership, and whether PMs need income protection. Finally, everyone needs to be clear on what would happen if someone took legal action against the surgery rather than clinicians, who would be liable, and whether the NHS indemnity scheme can cover this.

Likewise, there are often disputes within partnerships which must be managed and worked through. The partnership agreement is key to this process, but what should you do if you don’t have one? And if you suspect someone in your team of dishonesty, how should you go about tackling this?

One of the most crucial elements of managing finances is to undertake proper financial forecasting. There are plenty of software packages out there which businesses can use to forecast, but many PMs aren’t sure which one to use. And when it comes to pay rises, there is often uncertainty around how these should be managed and communicated.

Sadly, detecting and stopping fraud is an all-too-common part of life nowadays. You need to prevent fraud at all times, but to do that you need to know which financial policies and procedures can help to protect against it, and what to do if you discover it. 

One of the most common areas for financial queries to arise is when it comes to personal expenses. Is clothing, lunch or even life insurance an allowable expense? How should you keep expense records for an electric car which doesn’t take conventional fuel? And what about locum insurance—can it cover long-term sickness?

Now we are working in the age of the Primary Care Network, new questions have arisen regarding PCN finances. For example, what to do when employing non-clinical staff on behalf of the PCN, who do work for several practices, e.g. social prescribers. Many PMs also wonder how they should budget for the long-term, when the future of PCNs is not yet guaranteed.

In today’s uncertain climate, it can sometimes make financial sense to undertake a practice merger. But this brings its own set of problems, such as how to start the process, who to inform (ICS, NHSE, CQC?) and how long to allow. Would you know how to manage and align merging practices whose pay role days fall at different times in the month, or what to consider when dealing with leased buildings and owned buildings? If not, you aren’t alone.

Finally, an increasing number of organisations are operating as limited companies for a variety of reasons, but there is some confusion as to what this really means. Why might a PCN want to become a limited company? What are the benefits and disadvantages of running a GP surgery as a company, and how should taxes and other liabilities be managed?

Looking ahead to 2023, two areas in particular which are set to be hot topics in GP finance include how to get the most from the Investment and Impact Fund, and PCN Finances, as Primary Care Networks continue to integrate into our sector, but with their futures looking uncertain. 

If you want to learn more about GP practice finances, you can also browse bitesize FPM Finance webinars on YouTube for free.