The benefits of financial forecasting for general practice

Current challenges

Staff costs continue to rise, including increases in employer NIC, and while the 2025/26 NHS contract is now being applied, including 2.8% global sum uplift to fund anticipated salary increases – will that be enough? The 7.2% cash growth on the contract funding is seen as a significant move in the right direction and the biggest increase in general practice funding in over a decade. However, part of this funding is from recycled QOF monies and, therefore, practices will remain concerned about tightening cashflow.

Many practices will also be facing software and systems investment decisions to meet the NHS expectations to move from analogue to digital systems. Forecasting will help steer your practice through this changing landscape of primary care and allows you to react quickly to any further changes that may occur.

How can a practice forecast?

Preparing a line-by-line forecast of anticipated income and expenditure, together with details of the assumptions applied; means that practices have a clear view of their finances and can quickly revisit these and update them as new details emerge.

Areas for consideration include:

For income

  • Changes to local funding from ICBs along with Enhanced Services additions/amendments announced in the 2025/26 contract changes.
  • Contract changes to the structure and split of PCN income. Discuss how your PCN plans to distribute funding throughout the year.
  • Services/funding that you know to have reduced or ceased.
  • Are there any specific drivers for the future?


For expenditure

  • The cost impact of the government increases to national living wage and national minimum wage, along with NIC uplifts.
  • Can any roles be reimbursed from PCN Additional Roles Reimbursement funding or are any included in the ARRS roles expansion within the 2025/26 contract updates?
  • Is there technology/AI/software available that the practice can embrace to reduce the need for staff overtime?
  • Are there potential ways to minimise routine locum spend next year? Decide on a level of ad hoc spend to cover any unplanned or non-reimbursable cover.
  • What property or equipment upgrades are needed and is there any ICB or PCN funding available for these?
 

Bringing it all together

Once your income and expenditure positions are established, your budgeted position can be used as the basis of cashflow forecasting and the impact on the timing of payment and receipt of these income and expenditure items throughout the financial year. Cashflow forecasts can be produced using specific software or simply formulae driven (based on your income and expenditure budgets) to illustrate the net cashflow impact.

Regular reviews of actual performance against forecast, along with projected cashflow position, allow for agile and pro-active decision-making. Making your practice ready for any changes that may occur throughout the year. Finally, a detailed and regularly updated forecast gives you a clear baseline profit and cash estimate that guides your decisions on investments, improvements, and partner drawings – putting you in control.

If you would like assistance with preparing forecasts, please get in touch with our team.