When it comes to running a medical practice, the last thing on your mind is running through admin work and punching the numbers at the end of the day.
As a business owner you want to be profitable but gauging the success of your business can be hard when you see patients from sun-up to sundown. Luckily, accountants are the perfect solution.
In this article, we’re going to highlight three undeniable reasons why medical professionals should have an accountant who specialises in helping doctors on their team.
- We can help evaluate the financial impact of past business decisions
To get a better understanding of your medical practice, the first thing we’ll do is review your business as a whole and evaluate whether your business has enough cash to pay its debts, is profitable and is generating cash flow.
These indicators help us assess whether past decisions are working well, or whether some re-assessment is needed.
We look at your business in two ways:
Step 1: We assess the efficiency of your practice
Medical professionals are often run off their feet and don’t realise elements of their business aren’t running efficiently e.g. consultation rooms might not be in use or diagnostic machines might not be used to their full potential.
A specialist medical accountant can drill down further to assess the practice and consider things like billings per revenue earner and wages as a percentage of revenue.
Step 2: We assess the financial health of your business
Healthy medical practices return both profit and cashflow. As part of our quarterly review, we report on your profit and cashflow, then highlight why your cash flow differs to the reported profit.
- We can help model future decisions and determine what will be profitable for you
Question: how will we do if we change x, y or z?
If we discover areas needing improvement in your business, the next step is to determine what kind of changes need to be made and how these changes will be profitable in the future.
A specialist medical accountant will offer guidance on where to start and can explain the possible result on profit and cashflow if specific changes be implemented.
- We can help you work towards your strategic goals
Question: here’s where we want to go – so how do we get there?
Many businesses don’t have a clear budget, so this is one of the first things an accountant will do. A budget can help to create financial goals in terms of revenue, profit and cash flow, and helps medical professionals understand what needs to be done to reach those goals.
With an accountant, you’ll have regular updates on how the business is progressing and what’s working vs. what’s not.
Medical practices have unique accounting challenges – don’t manage them alone
Compared to average business owners, medical professionals have much more to think about, manage and keep a record of.
Achieving success and profit from a medical practice requires time, attention and skill – so it’s best to enlist the help of a specialist accountant to help keep track of your finances.
Adele is a Chartered Accountant and Director of A Squared Advisers based in Lake Macquarie. Adele advises small to medium businesses in the medical and health industries as well as self-managed superannuation funds. She works hard to give peace of mind and trusted advice to business owners, helping them build their net worth, reach their business goals, and clearly understand their financial position and goals. Adele is an Associate of the Tax Institute and a CA SMSF Specialist. She holds a Bachelor of Commerce from the University of Newcastle, a Graduate Diploma of Accounting from the Institute of Chartered Accountants and a Diploma of Financial Planning.