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Explaining the GP practice accounts – Part 7 of 10

by in Accounting

What to get out of your annual accounts meeting

It is normal practice to have a meeting with your accountants once the draft accounts have been prepared. This gives you and the partners the opportunity to discuss the accounts, resolve any queries so they can be finalised, and discuss financial matters likely to arise in the coming year.

While finance matters may not interest everyone, this a useful time to discuss business matters relating to the practice so getting the most out of the meeting is essential.

Planning

Get a date in the diary early. The larger the partnership the more difficult it is to get everyone together, so give plenty of notice for the meeting. Be realistic about start and finish times so that everyone can get there and allow sufficient time to go through things.

For larger partnerships, a prior meeting with the accountant, practice manager and finance partner is often sensible, to enable detailed queries to be resolved. The meeting with all the partners can then concentrate on the bigger picture and strategic issues.

If there are key issues that you wish to discuss it’s worth letting the accountant know in advance so they can come prepared. Of course not everything has to wait until the annual accounts meeting, but it’s often the point in the year when you re-visit some of the key changes ahead.

Pre meeting

Read your copy of the draft accounts before the meeting, and if you or the partners have any queries raise these with your accountant before the meeting. Often one of the areas that causes most confusion is the profit allocation, as people change sessions during the year. It is best if these can be clarified before the meeting.

Individual GPs should also have provided their personal accounts information in advance of the meeting. This is important because it allows the accountant to prepare both tax estimates and pension estimates. Large partnerships increasingly have the timely submission of personal accounts information as a condition within the partnership agreement so that any planning in respect of tax and pension shortfalls can be made as early as possible before the liabilities need paying.

At the meeting

Make sure the partners bring their copy of the draft accounts with you to the meeting or that an electronic version is available

The accountant should then in conjunction with the practice manager:

  1. Talk you through the accounts and key variances year on year.
  2. Explain the profit allocation so that everyone is happy how this has been allocated.
  3. Look at the partners’ current account balances and have a discussion around bonus allocations or future drawings.
  4. Provide feedback and statistics comparing performance with similar sized practices.
  5. Discuss any key changes ahead in the partnership – leavers, starters, property matters and so on.
  6. Look at the implications of any changes in the contract as well as any key changes in tax law.
  7. Discuss any changes in the pension scheme – although it should be noted that the accountant is not a financial advisor so will not be able to give specific financial advice on pension issues.
  8. If time allows individual partners should have time allocated to discuss their personal tax affairs and any changes.

After the meeting

The accountant will then send out final accounts to be approved in line with the terms of the partnership agreement.

At the same time they will also provide tax estimates and personal accounts but that is dependent on the partners providing the information.

Any other requests such as drawings calculations, predictions of profit share and other matters discussed at the meeting should also follow on.

Remember though that the annual accounts meeting is not the only time in the year an accountant can be contacted. Its better to deal with issues as they arise in year rather than wait until the accounts meeting to discuss everything.

If you have missed any of the previous articles, you can read parts 1-6 on the Practice Index blog.

Written by the Association of Independent Specialist Medical Accountants (AISMA)

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AISMA
Explaining the GP practice accounts – Part 9 of 10

May 21, 2020

Explaining the GP practice accounts  – Part 4 of 10

February 27, 2020

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