Managing the cash flows of a medical practice can be a laborious task. There are many aspects to consider, and it can be easy to miss something that could have long-term consequences. But it’s not impossible, and outsourcing this task can free up valuable time for you to focus on the important things in your practice. Cash flow management is a crucial part of running a business, and there are many different strategies that accountants for doctors, and financial advisors can use to help you manage your cash flow.
We will go over a few tips and tricks that will help you manage your cash flows and bookkeeping so that you can concentrate on what matters: taking care of patients.
Top 6 Bookkeeping Tips for Medical Practices
Whether you’re a sole practitioner or a busy medical practice, bookkeeping is a must. It is essential to know how your finances are doing to make decisions about future growth, staffing, and marketing.
Here are some bookkeeping tips for medical practices:
1. Maximise The Benefits of Technology
Medical offices may benefit significantly by using technology to manage their accounting. Medical facilities may save time and energy by automating routine procedures with the help of the correct software.
The ability to rapidly retrieve information upon request is only one of the many benefits of an efficient bookkeeping system for your business. Moreover, with the help of technology, precise financial records may be generated, making it less challenging to reconcile accounts and more quickly and adequately compile financial statements.
By utilising the cloud, medical facilities no longer need to keep large quantities of paperwork on-site. With a safe internet connection, your team can view and edit files from any location, in real time.
Compared to local digital storage, cloud storage is more secure and less prone to data breaches and inadvertent destruction of vital information. The cloud can accommodate your business’s ever-evolving storage demands at a lower upfront cost and with greater flexibility.
2. Frequently examine financial statements
The financial accounts for your medical practice provide essential information about its financial standing. You may track your cash flow, assets, liabilities, revenues, and costs by reviewing your balance sheet and income statement every month.
When tax time rolls around, many medical professionals glance at their financials once a year to provide information to their accountants.
It is vital to monitor cash flow and profitability in your medical practice by reviewing financial accounts on a more regular basis. As a bonus, you may track progress toward your financial objectives and address any concerns before they escalate.
3. Analyse your expenses and revenue
Another important tip for managing your medical practice’s cash flows is to analyse your expenses and revenue over some time (usually one year). This will help you determine if you are making enough money to break even or if you need to make changes to increase profits. You will be able to see how much money each customer spends on average, how long they stay with the practice before moving on, etc. This information will be useful for establishing future pricing strategies and identifying areas where you can save money by reducing expenses or increasing revenues through improved marketing strategies or service offerings.
4. Maintain tabs on your equipment and its devaluation
Your clinic would benefit significantly from investing in computers, blood pressure monitors, exam tables, and diagnostic tools. Degradation should be calculated throughout the expected lifetime of this machinery.
Equipment purchases should be recorded as an investment, not an expense, to avoid overstating monthly expenses. The proper approach is to keep tabs on the yearly degradation value of all of your equipment and manage it accordingly.
5. Bring in an expert
While some businesses do their bookkeeping, others just send everything over to their accountant when the year ends. When this occurs, it’s impossible to tell how well your practice is doing financially or when cash is coming in and going out.
Hiring a skilled bookkeeper might help you prevent these issues. However, for many practices, it may not be feasible to hire a full-time accountant. If that’s the case, it’s probably best to search for a ‘business advisor near me’ to help you manage your cash flow and get professional advice on managing your finances.
A medical practice accountant will be able to help you set up your accounting system and ensure that it’s keeping up with all of your needs. By hiring someone who knows what they’re doing, you’ll be able to focus on what matters most — caring for your patients.
In addition, experts can consolidate reports by compiling information from various resources. To free up time for patient care, many medical professionals are turning to outsourcing companies to handle their accounting and bookkeeping needs.
6. Set up accounts payable
Create an accounts payable account for each vendor who provides goods or services to your practice. Set up a separate bank account for all payments made by cheque, credit card, or electronic funds transfer (EFT). This will help ensure that money isn’t spent twice — and that checks aren’t written without sufficient funds in the account.
When managing your medical practice’s cash flows, you have a lot on your plate. You have to keep track of your finances, ensure the staff is doing their job and billing patients correctly, and be ready for audits at any time.
By outsourcing your bookkeeping and accounting requirements, you can focus on what matters: your patients and their wellbeing.