I am a GDP in a fully private practice. We have seven surgeries, five dentists, a specialist periodontist, four hygienists, twelve dental nurses, three receptionists, a practice manager, book-keeper a gardener and a candlestick maker.
We, like everyone else, have closed our doors, in our case on 20th March and I fully expect us to remain closed until July.
After that first weekend I knew every single outgoing, but I confess that up until this disaster I hadn’t really paid a lot of attention to the costs, as we were busy and everything was being paid on time.
Below are my top tips for areas to look at in order to control costs and maintain cashflow during this crisis:
Staff Welfare
Furlough: The first thing to do was make sure the staff were safe. I had already guaranteed to pay them their salaries for three months before the furlough was announced. For those of you that have PAYE staff, use the furlough.
Your payroll people will sort out the mechanics of it, brighter people than I will tell you how it works, but simply, you have to send a letter to each staff member telling them they are furloughed, it has to be for a minimum of three weeks, you can top up to 100% (HMRC pay 80%).
I furloughed most staff immediately and kept a few to do essential jobs at the practice. I now have just one staff member on normal pay, the rest are all furloughed, and you can start them at different days.
You can also require them to take some holiday during furlough if you give notice (two weeks’ notice for each week of holiday). If you do this, you have to top up to 100% of their wage for the period of holiday. I think it’s a good idea to at least get one week’s holiday in this time as you will need them all at work when you start back.
Self-Employed Team: This is tough as the dentist associates will be above the threshold for any government help, and our hygienists will be hovering around the limit. I am paying the associate’s their proportion of the plan fees that are still coming in, and am loaning the hygienists 50% of their usual take home to be repaid over two years interest free out of future earnings. I have prepared a loan agreement to cover all eventualities.
Keep Staff Involved: You need them firing on all cylinders when we go back, keep them in the loop, communicate with them. Zoom is fun and an email about what you are doing each week will help too.
Cost Control
Make two spreadsheets, one for the practice and one for home.
Put everything down, get all your purchase ledgers and Direct Debit/standing order details out and start with your biggest loans. Ideally phone and speak to each provider and check that what you arrange will not penalise you later.
Bank Loan (Practice Loan): The banks are very helpful and will defer payments for three months. This will increase your payments slightly later – it is now that we need to control costs.
Corporation Tax: If, like me you are a limited company and pay corporation tax, and like me you had a terrific 11.5 months in the tax year ending 31st March and the next three months will be fallow, then you can extend your year-end by six months and take an average. This will reduce your corporation tax bill on 1st Jan 2021. Ask your accountant. You do not want to be borrowing money for tax – therein lies disaster.
Equipment Loans: I have a lot of these with Siemens, DeLage Landen and Hampshire Trust.
I have found all of them to be very helpful, a quick phone call then they send you an email – you need your agreement number and they will stop the payments for three months. You can elect to add the additional amount to the remaining payments and keep the existing term or add three months payments on to the end of the term.
Business Rates: I don’t qualify for the government-backed rate relief, my rateable value is too high. You can find out what your rateable value is by typing ‘rateable value’ into Google and the www.gov.uk site will come up on the page you need. Type in your postcode, find your property and the value comes up.
Under £15k and you qualify, the council will contact you with a rebate. You may also qualify for a £10K grant. I am investigating rate relief as my practice is now empty and I am seeing if I can get rate relief due to no occupancy.
Even if you do not qualify for any help, they will defer payments until July.
Indemnity Insurance: Your indemnity insurers will reduce your premiums markedly; you still need cover for telephone advice. Just give them a ring and it will be done on the spot.
Business Waste/Clinical Waste: Again, trawl through your purchase ledger, get the contract number and they will stop most charges. There may just be a small rental to pay for the bins, some companies will only stop payments for a month, so you need to note down when to stop it again.
Practice Management Software: Call your provider and you will find that this can be trimmed down a lot. Keep the software support as you will need them to help you turn off automatic reminders and then restart them safely without sending out all the ones from when you were closed (especially if you send out SMS messages as that will cost you for nothing!).
Water: The water companies have been really helpful too and cut ours to zero, just from a phone call.
CQC: The CQC will also reduce their fees www.cqc.org.uk/fees. You will need to pay the full amount still but they will reduce the next two months to £10.
Collect Accounts Owing: Send any accounts owing out, by email if you have them.
Home
Home Mortgage: Investigate a three-month mortgage holiday. I couldn’t get through on the phone, but emailed my bank manager and they have done it for me. This does increase your remaining premiums slightly, but cash flow is key now.
Cars, PCP Agreements: These can be put on hold too, just check how it affects the payments afterwards. If you are coming to the end of one and were going to pay the balloon payment, they will arrange finance for you if you require it.
Home: Think about how much do you really need to live on? There is ‘non-essential’ stuff such as gym membership, dog walker, etc. Personally, we have kept paying something as they are suffering too and do not have the means as we do to recover later.
I am sure I have forgotten something and most of you will have already done it!
But, good luck – keep your teams in good spirits and we will come out stronger when we reopen. At least I know how much we spend a month now!
