Busy, but is it profitable?
Your agency has had a strong quarter for shifts filled. Yet the management accounts show margin down. Was it the new framework rates? The bank holiday weekend when you paid enhanced rates but a client was charged at a flat rate? A run of rejected invoices that became credit notes? Weekly paid nurses on one client whose charge rate has not moved in years?
Nobody can say, because the figures that would answer it are split between the booking system, the timesheets, payroll and the accounts, and the accounts only show the total.
Why margin is hard to see
An agency's margin is made or lost shift by shift. The charge rate and pay rate are set at booking; the actual hours come from the timesheet; on-costs depend on how each nurse is engaged; and credit notes and cancellations arrive later. Each lives somewhere else.
- Charge and pay rates are not always recorded on the booking itself.
- Enhancements for nights, weekends and bank holidays are paid and charged under different rules.
- On-costs differ between nurses paid through PAYE and those paid through other routes.
- Credit notes and cancellation charges are recorded in the accounts, not against shifts.
- Management accounts arrive weeks after the shifts.
What not knowing costs
You cannot tell which clients and grades are worth pursuing. Rate negotiations are based on instinct rather than evidence. Loss-making patterns, such as a client with frequent credit notes, carry on unnoticed. And when a framework or client asks for a rate change, you cannot quickly model the effect.
Bookers also lack a signal. Without margin by client, a booker naturally prioritises whichever request is most urgent or whichever client shouts loudest, even when a quieter client's shifts pay better once enhancements and credit notes are counted.
| Margin element | Where it comes from |
|---|---|
| Charge | Booking rate tables, actual hours from the approved timesheet |
| Pay | Pay rules applied to the same hours |
| On-costs | Your chosen rates by how the nurse is engaged |
| Adjustments | Credit notes and cancellation charges linked to the shift |
| Margin | Charge less pay, on-costs and adjustments, per shift |
How we build shift margin reporting
- Charge and pay are calculated from the same booking and approved timesheet, so both sides of each shift are known.
- On-cost rates are set by your finance lead for each way nurses are engaged, and applied per shift.
- Credit notes, short payments and cancellation charges are linked back to the shifts they relate to.
- A margin report shows each shift's result and rolls up by client, framework, grade, specialty, shift type and booker.
- Weekly figures appear as timesheets are approved, not weeks later.
- A simple modelling screen lets you test a proposed rate change against recent shifts.
- Figures reconcile to your accounting system, such as Xero or Sage, so the management accounts and the margin report tell the same story.
The on-cost assumptions are your finance lead's to set. The report shows its workings, so anyone can see how each figure was reached.
What you can see now
Margin by client, grade and shift type, week by week. The bank holiday shifts that cost you money are visible, and so is the client whose credit notes are eroding a good rate. Rate negotiations start from evidence. And the management accounts stop being a surprise.
It also helps with conversations that are otherwise awkward. When a client pushes for a lower rate, you can show them what the shifts actually cost to fill, and when a nurse asks for a higher rate on a hard-to-fill ward, you can see what the booking would still earn.
Is this where you are?
- You know turnover by client but not margin.
- Enhanced shifts are charged and paid under different rules nobody has compared.
- Credit notes are not linked to the shifts they relate to.
- Management accounts are the first time you see margin.
- You cannot quickly model a proposed rate change.