Why a budget alone is not enough
Most practices have an annual plan – if at all – made once in January. By spring it is out of date, and from then on the figures are only compared with last year. That tells you what has happened, but not whether you will reach your target.
A rolling forecast keeps the target and updates the path to it every month. Whatever has happened is replaced with actuals; the remaining months are re-estimated on the basis of what you now know.
The three drivers
Instead of forecasting dozens of accounts, focus on the few figures that move profit:
- Doctor hours that will actually be booked in the remaining months.
- Gross profit per doctor hour – see gross profit per doctor hour.
- Fixed costs for the remaining months.
Profit for the rest of the year = doctor hours × gross profit per doctor hour − fixed costs.
Sample calculation: the forecast in July
A practice aims for €300,000 profit before tax this year. After six months, actual profit is €130,000.
SAMPLE CALCULATION
Sample calculation with assumed values, not client data.
All figures in euros. The logic works in any currency.
The gap is €70,000. Now the forecast becomes useful, because each lever can be priced:
| Lever | Effect in the second half |
|---|---|
| Prices reviewed: +€50 gross profit per doctor hour | +€35,000 |
| Gaps filled: +60 booked doctor hours | +€24,000 |
| Remaining gap | €11,000 |
With two realistic levers, the practice gets close. The remaining €11,000 is a deliberate decision: a cost saving, a further lever – or an honest adjustment of the target. Either way, it is decided in July, not discovered in December.
How to keep it alive
- Monthly, after the KPI review: replace last month’s forecast with actuals, re-estimate the rest. See the practice cockpit.
- Be cautious, not hopeful: forecast booked hours on the basis of the last three months, not the best month of the year.
- Write down assumptions: one line each for hours, gross profit per hour and costs.
- Price every lever before you decide on it.
This page explains the business and financial context. It is not a substitute for tax, legal or medical-regulatory advice in your country.