How a medical practice builds a budget and keeps a rolling forecast
Updated 16 October 2026
A practice budget is the plan the owners approve once a year. A forecast is the current estimate of where the year will land, and it changes as the months come in. The owners set the budget in advance and hold it fixed. The forecast moves with the schedule, the payers and the hires. This page explains how to build both from patient volume, and it uses clinic figures that franchise brands publish in their Franchise Disclosure Documents (FDDs). An FDD is the document a franchisor must give a buyer before a sale, and its Item 19 holds any sales or profit figures the brand chooses to publish.
Start the budget from patients, then convert to dollars
A budget built bottom-up starts with visits. The practice sets visits per provider per day, working days, and the amount a visit collects from each payer. Revenue is the product of those three figures for each service line. A top-down budget takes last year's profit and loss statement and adds a growth rate. That method hides the reason for every number on the page, so nobody can explain a variance later.
A full practice budget carries six parts. Revenue is split by service line and by payer, with each month's seasonal pattern. Provider pay sits on its own lines. The staffing plan ties each role to the visit count it supports. Equipment, build-outs and technology go in a capital plan. A cash view sits beside the profit view. A sensitivity table shows what happens when volume, payer rates or costs move.
AFC Urgent Care's 2026 FDD reports 291 franchised centers averaging 35.2 patients a day and $146.24 collected a visit, on 12,772 visits a year. Multiplying 12,772 visits by $146.24 gives $1,867,777. AFC Urgent Care's published average for those 291 centers is $1,867,756, so the bottom-up build lands within $21 of the filed figure. An AFC Urgent Care owner who budgets this way can trace every revenue dollar to a patient count and a rate.
Spread the year by month, using the real ramp
An annual figure divided by twelve gives a flat line. Medical practices rarely earn a flat line. New providers take months to fill a schedule. A new location takes longer. Respiratory season, school physicals and deductible resets each move volume in predictable months. The budget should place each month's revenue where the practice expects it to fall, so the monthly comparison means something.
The Joint Chiropractic's 799 clinics open all of 2025 averaged $563,514 in sales, which is $46,960 a month on a flat split. The Joint Chiropractic clinics that opened in January 2025 billed about $8,000 in their first month, about $25,000 around month six and about $36,000 by month eleven. A first-year budget for a new Joint Chiropractic clinic that used the flat $46,960 would overstate every month of that first year. The Joint Chiropractic's Item 7, the FDD table of opening costs, sets aside $75,000 to $105,000 of additional funds for three months.
The lines that belong in the forecast
The forecast repeats the budget's structure with current assumptions. Revenue stays split by service line and payer. Provider assumptions cover visits a day, days worked and the ramp for each new hire. The staffing model lists full-time equivalents (FTEs) by role, with each planned hire and its start month. Supplies and drugs move with volume and are never held flat. Capital plans carry their real dates. Owner pay and partner distributions sit in the forecast as named lines, where everyone can see them.
QC Kinetix's 39 reporting clinics averaged $924,273 in 2025 sales and spent $209,546 on advertising, which is 22.67% of sales and $17,462 a month. QC Kinetix's FDD sets a required media spend of $240,000 to $480,000 a year, so those clinics spent $30,454 less than the low end. Each QC Kinetix advertising dollar returned $4.41 of revenue at the average. A QC Kinetix forecast that holds the media line at the required $240,000 needs a revenue line that moves with it.
Run three cases, then read which assumption moves the result
One budget figure gives one answer and no sense of the risk around it. Three cases give a base, a lower case and an upper case. The value of the exercise is in seeing which assumption changes the result most. A 10% fall in patient volume may push cash below the payroll line. A hire delayed by one quarter may move year-end profit by a few points. Each of those is a finding the owners can act on before the year starts.
AFC Urgent Care's FDD reports 79 centers run by the franchisor's affiliates in eight groups. The AFC Urgent Care group at 32.0 patients a day earned $70,959 of 4-Wall profit, which is profit at the center before overhead above it. The next AFC Urgent Care group, at 28.1 patients a day, lost $45,895. A drop of 3.9 patients a day, or 12.2%, moved the result by $116,854. That is the size of swing an AFC Urgent Care downside case should test.
Ownership and the review calendar
The practice administrator or controller builds the budget. The owners or partners review and approve it. A budget that no one owns has no defender when the variances arrive. The budget is set once a year. The forecast is refreshed every quarter. The monthly meeting compares the month's actual results with the budget line by line, and someone explains every variance above an agreed threshold.
The detail should reach the level where a variance points to a decision. For most practices that is monthly figures by department or service line, with headcount and the largest expense lines shown on their own. A budget at that level lets the owners ask why a line moved and get a named answer.
The figures are an illustration. A practice budgets $6,000,000 of revenue across two locations and sets a variance threshold of 5% for any line. In March, the second location's revenue comes in at $228,000 against a budget of $250,000, a variance of $22,000 or 8.8%. The threshold triggers a review, and the controller traces the shortfall to a provider who started six weeks late. The forecast moves that provider's ramp back six weeks for the rest of the year.
What this means for a practice owner
The budget is the yearly plan and the forecast is the current estimate. Both start from visits, rates and staff, and both split revenue by payer and service line. The budget is reviewed against actual results every month. The forecast is refreshed every quarter. Three cases show which assumption carries the most risk. At AFC Urgent Care's affiliate centers, 3.9 fewer patients a day separated a $70,959 profit from a $45,895 loss.
Getting the budget built
Averan Advisors builds practice budgets, rolling forecasts and the monthly variance review as part of its fractional CFO work. The controller service closes the books each month so the comparison has accurate actual figures behind it. The Medical Practice Numbers Check sets a practice's own figures beside these measures.
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