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Optimising your cashflow management during Covid-19

GP practices in England have been forced to dip into their own pockets to get themselves ‘Covid-19 ready’, and all with a fairly vague promise of reimbursement from NHS England from the Covid-19 support fund, which will need to be rubber stamped by the Treasury.

Significant expenditure has been incurred by practices, be that from procuring PPE, staffing practices over bank holiday weekends, or upgrading the IT infrastructure of the practice and network.

Although the headlines have been that income is being protected, and reimbursement will be received, timing of receipts means that there is a potentially large effect on practice cashflow. Unfortunately, this is a familiar story for our GP practice clients who are often promised funding streams by the government with the detail to follow later. Golden Hello scheme and PCN DES anyone?

Cash is king

In any business ‘cash is king’. You need cash to purchase materials and pay your staff, which in turn you use to generate your income. General practice is no different. The NHS is catching up in this regard and many GP practices are now beginning to view themselves as the multimillion-pound turnover businesses that they are.

There are GP specific problems that impact upon cashflow, such as a dip in childhood immunisation payments based on targets, private income being paused and some locally commissioned enhanced services not being paid. It is therefore important to have systems in place to manage these issues.

Practical cashflow tips

  • Ensure cloud accounting software is being used with an automatic bank feed, and regular bank reconciliations are being carried out
  • Produce rolling quarterly cashflow forecasts with monthly variance analyses so problems are not stored up until the year-end
  • Implement a robust internal system for chasing outstanding monies from patients and other bodies alike
  • As NHS England and PCSE do not necessarily get payments right (as they prove time and time again), work to correct this and chase any missing income in real time. As an example, we work with our clients to share income statements monthly and chase PCSE on their behalf. If you are due money, it is better off in your bank account than the person that owes you
  • Review standing order and direct debit dates and amounts to ensure that a) these are all still necessary and b) they are paid after the large Open Exeter funding stream is received each month.

Claiming costs back from the General Practice Covid Support Fund

We have seen some regional variations in terms of the quantum of accepted claims and the speed at which these have been reimbursed. The Treasury has been very slow to finalise the position on this and there is concern they have still not approved the General Practice Covid Support Fund.

One thing that is clear is that any claim will need to be very carefully and very specifically evidenced. Our recommendation is for a solely Covid-related expense code to be set up within the chart of accounts on your accounting software. If a practice is already using a cloud-based package, then the relevant invoice can often be attached as a PDF to the transaction on the system, which should make claiming from the fund easier.

We feel that there is a lot of scope for genuine staff claims over the last couple of months as management staff in particular had to dedicate a lot of time to ensuring that practices were ready for remote working and able to deal with the challenges.

The main issue surrounding staff reimbursements was that a lot of the guidance cited that this needed to be pre-approved by the CCG, but in reality, NHS England just didn’t leave enough time for this to happen, and as such a sensible evidenced claim should suffice.

Rob Glentworth FCCA is a medical accountant and associate director of Moore Scarrott Healthcare, nationwide specialist medical accountants.

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