Bought in March, dispensed in April, paid in June
Dispensing is a working-capital business wearing a healthcare uniform. You pay the wholesaler on their terms. You dispense. You submit. NHSBSA pays an advance, then settles properly two months later. The gap between those events is funded entirely by you, and it is wider than most owners realise until it is measured.
What the advance actually is
Items declared on the FP34C, multiplied by the latest available average Net Ingredient Cost for your pharmacy, less the prescription charges you collected, paid from day 8 of the month for prescriptions dispensed one month earlier. It is expressly an estimate — so an unusual month gets priced at your old average and the correction arrives later.
How we set the ledger up
- NHS income separated by stream, with advance and reconciliation as two distinct events
- Wholesaler purchases matched to the month they will be reimbursed in, not the month they were bought
- A rolling view of the working capital gap in days and in pounds
- Prescription charges collected tracked separately, because they reduce the advance
Common questions
How long is the gap between dispensing and being paid?
On the verified 2026 dates, an item dispensed on 1 June reaches an estimated advance on 9 July — 38 days — and final settlement on 1 September, 92 days. An item dispensed on 30 June reaches the same advance in 9 days and settlement in 63. So the honest range is 9 to 38 days to an estimate, and 63 to 92 days to the final figure. The stock behind those items was paid for on the wholesaler's terms, which are considerably shorter.
What exactly is the advance payment based on?
Items declared on the FP34C multiplied by the latest available average Net Ingredient Cost for your pharmacy, less prescription charges you collected, paid from day 8 of the month for prescriptions dispensed one month earlier. It is expressly an estimate. That matters because an unusual month — a high-cost item, a change in your patient mix — is priced at your old average, and the correction arrives later. If you dispense something expensive and unusual in March, March's advance will not reflect it; the money turns up in the May reconciliation. Knowing that in advance is the difference between a planned dip and an overdraft conversation.
What happens if a reconciliation is negative?
It is recovered from your next advance payment. This is the mechanism that turns a quiet pricing month into a sudden cash problem: the shortfall does not arrive as an invoice you can query and schedule, it is simply netted off the next payment. Bookkeeping that tracks the expected reconciliation alongside the advance is what gives you warning. It also tells you whether the negative was a one-off pricing effect or the start of a pattern, which is the question that actually matters — one is cash-flow timing, the other is a margin problem you need to act on.
Do we need to change software?
Usually not. The work is in how the ledger is structured rather than which package holds it — NHS income separated by stream, wholesaler purchases matched to the month they will be reimbursed in rather than the month they were bought, and the advance and reconciliation recorded as two distinct events rather than one lump. Most cloud packages will do all of that once someone sets them up to. If you are already on Xero, QuickBooks or Sage we will work in it rather than move you, because a migration mid-year costs you comparability at exactly the point you want to see whether something is improving.