This site is intended for health professionals only

Chasing late payments

22 November 2016

Share this article

As with any business, GP practices must maintain profitability in order to continue to provide their services.

This can be reduced to simply having your income exceed your expenditure. Usually it will fall to the practice manager to scrutinise the finances of the practice to ensure that everything runs smoothly and the staff can continue to maintain service levels. However, with the overloading of services in primary care and the NHS looking for efficiencies in their Family Health Services (FHS) – the support services that process payments to practices – it is understandable that sometimes unpaid invoices can slip through the cracks.

With every practice responsible for invoicing relevant bodies for services provided and ensuring the correct level of income is actually received in a timely manner, practices must establish fail-safe systems for recording work performed and collecting income from whoever commissions the work. The result being that these systems need to be designed, staff trained on their use and the systems then implemented, all of which diverts valuable management time.

While a specialist medical accountant can assist GP surgeries in putting a system in place to organise their invoices, the day to day recording and chasing payments will fall to a member of staff – most likely the

practice manager. GP practices are often comparatively small and with increased workloads great trust is placed in their staff to complete financial transactions and manage receipts and payments without the controls, which, in larger businesses would be there to protect not only the practice, but the staff involved.

In order to do this effectively it is important to make a distinction between monitoring the invoices raised, and acknowledging payments received. Without having an adequate system or method in place for logging the work that you’ve carried out, it is impossible to know where or when invoices need to be sent. In turn, this could mean missing out on payments that are owed to the practice by simply not realising that you haven’t asked to be paid for services you have delivered. Within this system it is also important to distinguish between invoices that need to be raised with a third party, and those services which are meant to be paid automatically by the NHS. In ensuring that you are charging for all services provided you are protecting the overall profitability of the practice.

It is equally as important to extend this system to allow for the monitoring of money into the practice. In logging the receipt of monies, or expectation of payment for services provided, you are protecting the day-to-day cashflow of your business to ensure its smooth operation.

Create a monitoring system that works for you

There are many different methods available for logging invoices and payments. Whether you choose to opt for a top of the range paid for service, or something as simple as an excel spreadsheet, you must make sure that the service works for you.

If you are confident in using excel, something as straightforward as logging payments and creating a method for flagging up unpaid invoices should be sufficient. This approach is adopted by many practice managers as if used properly it can be very effective in identifying any gaps in income.

It is also important to include a log of the cash flow of the practice, in most basic terms the day to day income and expenditure, including dates of expected payments.


Whether you choose to keep hard copies of your paperwork, or prefer digital versions, it’s recommended that you file the following records:
l Copies of all invoices sent
l Records of the date invoices are due, the amount paid, to whom they have been sent, and the period covered.

Keep a calendar

Noting the key dates on a calendar will help to plan resources and ensure that no invoices are mislaid. As well as marking the date invoices that are due, it’s also useful to establish when reminders should be issued so that the cash flow of the practice is protected and no payments are left unclaimed.

Being able to visually review key dates will also help you to identify occasions when there are expenses coming up around the same time. Having the ability to foresee your expenditure allows you the opportunity to adjust internal targets and prioritise your actions.

Delegate and train

Although it usually falls under the practice manager’s remit to chase late payments, it can be beneficial to train some admin staff in sending out reminder notices and updating the practice’s records accordingly. In giving certain individuals ownership over key duties it could prevent tasks from being missed.

It is worth considering that this might involve an element of training – or at least a briefing session – and you will need the right staff for the right roles.

While some work will require invoices to be raised immediately, other services might require invoices at more timely intervals, or when the work has been completed. It is important to monitor these dates closely – this could be completed by someone entirely different to those managing the work deadlines – just be aware of the implications regarding staff sickness and holidays.


You must ensure adequate time is allocated to chasing missing payments. This includes:
l The design and implementation of your monitoring system
l Training or briefing for any staff involved
l The creation of invoices and reminders
l Updating shared work calendars with reminders

Be cautious and mindful as mistakes can happen but catching an incorrect payment early enough means that it can be resolved with a simple phone call instead of having to go through the annual accounts at the end of the year to find where the discrepancies are. While technology can certainly help with organising payments and invoices, there is no substitute for meticulous monitoring to keep error to a minimum. Once this is all in place, makesure this works for your practice.

Chasing payments

In the case of third party invoices, it could occasionally be the case that you don’t receive payment when expected. However, as long as you have an adequate monitoring system in place you will easily be able to see as and when this is occurring, making it easier for you to maintain control over the practice’s cash flow and follow up on any late payments.

Good practice for chasing money owed to you is usually as follows:

1. Send a pre-emptive reminder

Using your invoice tracking system, you will be able to see which payments are upcoming and a polite phone call or reminder letter before the due date can ensure that the service is prepared to pay on time.

2. Send a letter

As soon as payment is overdue, a letter should be sent and followed up with a phone call.

3. Issue a second reminder

If your previous efforts at securing payment haven’t worked it could indicate that the third party you’re dealing with is having difficulties in paying. If you believe this to be the case it is usually best to arrange a meeting to discuss payment options with them, such as a payment plan.

However, if you think they are just being difficult it is a case of ringing them until they agree to pay. Sometimes it is worth mentioning that you’re in the area and able to call by – which usually leads to either a meeting or payment being sent.

4. Involve your solicitor

It is at this point that you need to consider bringing in your solicitor to write to the third party to motivate them to arrange payment. This can be a difficult situation and needs to be handled professionally and with caution. Having your solicitor outline the consequences of refusing to pay can either prompt the company to contact you, or at least informs them of the next steps you will take.

When over three months have passed, it’s unlikely you’ll want to do repeat business with the company as they are directly affecting the cash flow of your practice. At this point you can either approach a debt collection agency to chase the money on your behalf, which will incur a fee but has a proven success rate.

The final option is to take the third party to small claims court, which could be costly and time consuming. This is only worthwhile if the payment is over around £10,000. 

Andrew Robson, Medical Services Manager for BW Medical Accountants

Want news like this straight to your inbox?