MHA | How to ensure your healthcare practice is ready for year-end

How to ensure your healthcare practice is ready for year-end

· Posted on: February 9th 2024 · read

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With 31 March fast approaching, ensuring that your books and records are correct and accurate will not only assist your accountants but will also ensure that everything for that period has been considered.

However, with Practice / Finance / Business Manager’s time being stretched more than ever, it can be difficult to know which areas to concentrate on and what you should be looking for. 

Using our existing client experience, we have created a list of common problem areas and how we suggest you deal with them.

Reconcile

Does your bank balance in your specific system match the balance shown on your bank statements? 

If not, do you have a list of differences or uncleared items at your year-end? This is the most important area for you to check as if the bank is correct / balances then you know that the majority of income and expenses have been included.

Income streams

Have you fully analysed all your income streams, so you do not have large bankings labelled as ICB / NHS in your system, which could be broken down into enhanced services or other types of NHS income? This has become a larger problem more recently with ICBs not sending remittances or making it clear what an amount or deduction was for.

Within income streams, ensuring that your PCSE reports match what has been banked is vital. If it doesn’t, ensure that you have the remittance which shows what the extra income or deductions was for and enter this onto your system.

Debtors (who owed money to you)

At your year end you should have a list of services and individuals who owed you money for either enhanced services or for items such as insurance reports. It is also useful to know especially for ICB income; which quarters have been paid as some services are paid a quarter in arrears.

Another area in debtors to consider, is if your system is able to run an “aged debtors” report? Are all the entries on here going to be paid and if not, should they be written off? 

Carrying forward old debts can complicate a system and can lead to chasing debts which will not be paid.

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Within income streams, ensuring that your PCSE reports match what has been banked is vital. If it doesn’t, ensure that you have the remittance which shows what the extra income or deductions was for and enter this onto your system.

Creditors (who you owed money to)

As with debtors you should have a list of people and businesses you owed money to at the year end. 

The largest ones would normally be for items such as drugs and medical expenses, with some being two or three months before payment is due.

As with debtors if your system is able to produce “aged creditors” reports, ensure that the list is accurate and does not hold any old balances or small differences which need to be removed.

Stock

As close to your year-end date as possible, take stock of all items, including drugs and stationery. Stationery has become more important in recent years due to the cost of printer and toner cartridges.

PEPPS (or Professional Expenses Paid Personally)

While not strictly a part of the practice’s records these should be prepared alongside the accounts to ensure that nothing is missed and items which have been paid for by the practice are not duplicated. 

Each partner should ensure they provide their information in the format requested.

As close to your year-end date as possible, take stock of all items, including drugs and stationery. Stationery has become more important in recent years due to the cost of printer and toner cartridges.

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