Coronavirus has been many things – and most of them distressing – but I didn’t expect it to be the thing that saved me money on banking.
After years of GP partners who thought I might run away with their cash or who couldn’t remember their passwords to save their lives, in my new practice I’ve finally won the battle and saved a packet into the bargain.
Changes to banking and a lack of patients coming into the practice have given me time and space to review the existing status quo.
With fewer patients coming in for private medicals, we decided to switch to a contactless card machine while we had the chance. After all, it’s the way forward in a COVID-safe environment.
Not only that, I’ve realised that the bank has made it cheaper to use online payments instead of banking cash and using cheques to pay bills.
For the very first time, I’ve paid ALL our suppliers using online banking; I haven’t had to chase around the practice to check which partner has or hasn’t got the folder for the cheques, and I haven’t had to locate the cheques after ‘someone’ has put them down ‘somewhere’.
It’s been liberating, to say the least. I’ve grasped the nettle and set up electronic remittances while I’m at it. After all, email is free and I’ll save a fortune by not having to pay for a stamp on a cheque or remittance.
It’s something I should have done ages ago, when I noticed that my finance email was filling up with e-remittances and invoices from everyone else.
Incredibly, we’d still been paying in the takings and withdrawing cash for the petty cash, so paying twice over. It seems crazy when I think about, but it’s the way it had always been done.
After all my tinkering with the payments and receipts, the unexpected bonus has been that not only have I saved the cost of a stamp for each of our 45 suppliers, but my banking charges have reduced by 50%.
Not to mention the amount of time each partner spends signing cheques: for an average 100k partner, each five-minute increment represents around £5, so over the year, it really adds up.
The amount of time we spend writing cheques and chasing the folder round the practice is mind-numbing. I calculated how much we’d save by looking at the amount of time I spend writing cheques and chasing partners to get them signed, the amount of time the GPs (x2) spend signing them and the reduced amount of time to do that electronically. I also looked at the cost of posting all those remittances and cheques, plus the reduction that we achieve by sending electronic payments rather than cheques. I was quite surprised to see the total was over £1k a year!
Faster payments and e-remittances have saved us both time and money. I’m only sorry it took a dire situation like a global pandemic to make us think about it.
If you’re interested in finding out how I saved 1k on this, this exercise will explain more!
What: Electronic Payments and Remittances
Who: PM and Partners
Resources: 5-10 minutes partners meeting time
Benefits: Reduced admin/partner time, reduced expenditure on banking costs
How long(estimated): 5 minutes meeting time, 1.5 hours PM time
Related KLOE: N/A
Having decided to check whether I could save money on our banking charges, I discovered that our bank has increased charges for cheques to 70p per cheque, and the equivalent electronic payment is only 35p. Additionally, the accounts package I use has the facility to send an electronic remittance when I mark the item as paid, by adding email addresses from the invoices I’ve received it took only a few extra seconds per invoice, but the longer term time saving will be huge.
I took 5 minutes of a partners meeting to explain what I was doing and the partners agreed that they’d be happy to log in from their desks to authorise payments rather than having to sign a bundle of cheques.
Once the partners had agreed they’d be happy to go ahead, it only really took me about an hour to add the new bank details for our suppliers as most of them have their details on their invoices. It probably took me an additional half hour to add the e-mail addresses and the job was complete.
The figures I used to calculate my annual savings are below, you might be surprised just how many suppliers you actually pay each month, and how much you could save.
45 x 12 x £0.65 (2nd class stamp) = £351 postage
45 x 12 x £0.35 (difference from cheque to faster payment) = £189 banking fees
12 x £23 (my hourly rate) x 1.5 hours = £414 admin time
12 x £51 (GP partner hourly rate) x 0.3 hours = £183.60 GP time
TOTAL £1,137.60 per year saving