Four Tips to Get Your Specialty Practice Financially in Top Shape

Posted by Team PracticeForces on Dec 23 2014

Fotolia_52605071_Subscription_Monthly_MThe end-of-the-year period is an exciting time for a number of reasons: holiday festivities, vacations, quality time spent with loved ones, shiny decorations, and taking care of financial matters for your medical practice before the start of 2015 calendar year and tax season. For experienced practice owners, dealing with finances before the New Year eventually becomes a somewhat routine activity. On the other hand, physicians with recently established medical practice view year-end financials as a formidable hurdle to overcome. No matter where you are on the business “spectrum,” I wanted to share 4 important tips with you on how to make your financial transition into 2015 smoother and more efficient.

1. Consult With Your Accountant as Soon as Possible

December is usually considered a slow month for office production because healthcare providers and their staff take a holiday break. Keep in mind that your accountants and financial advisors go on vacation and are out of commission for a considerable part of the month too. Therefore, scheduling conflicts are bound to arise if you put your appointments with CPAs, financial advisors, etc. off until the very last minute, increasing the possibility that either you or they would be unavailable.

To avoid such a pitfall, set aside a time in advance (up to several weeks ahead) when you and your accountant can sit down and go over your financial records and projections, and tax matters. Don’t wait until the week between Christmas and New Year 2015. Be prepared with all of your paperwork and a list of questions for your appointment with your accountant.

2. Ramp Up Measures to Collect on Outstanding Medical Bills

Examine your accounts receivable for overdue bill payments and create a course of action on how to bring it down as much as you can by the end of 2014. I suggest you make a game of it with your personnel. Get them to intensify their efforts on collecting debts from patients and reward them when they meet certain targets to reduce your accounts receivable.

As a word of advice, set up or update payment plans with patients in your debt -- if you haven’t already. As it cheesy as it may sound, think about emphasizing the spirit of giving in this holiday season and helping your debtors come up with payment options that weren’t available to them before, such as gifts of money or loans from family and close friends.

The truth is: the longer you wait on outstanding bills, the less likely those patients will end up paying them off. To mitigate the risk of losing that precious revenue source, invest a few more of your resources into reducing your accounts receivable before the New Year 2015.

3. Take Advantage of Practice Expenditures to Limit Taxation

A fully or partially cash-based specialty practice can spend some of its cash profits on fixed expenditures to minimize taxation. These 100% tax-deductible items support and benefit the overall establishment and include marketing efforts and collateral (i.e. website creation and maintenance, newsletters, brochures, flyers, and business cards), office supplies, financial management costs, and office rent payments. All business-related food and entertainment expenses are 50% tax-deductible, and business-related gifts (usually given as rewards for referrals, production, etc.) for your staff and patients are fully tax-deductible up to $25 per person.

Therefore, don’t hesitate to make your fixed expenditures if you are going to make them at some point anyway. That money spent for this before the New Year will save you money on your tax return.

4. Use the Downtime in December to Get All of Your Finances in Order Before the End of the Year

Utilize your downtime in December to conduct a thorough audit of your financial records and accounts over the past 12 months in order to get an accurate sense of where you need to go into the New Year. Analyze for what you owe and what is owed to you. Are all account balances correct? Can everything be accounted for?

Then make your financial projections and set a broad vision with smaller goals of what you want to achieve over the coming months. Handle discrepancies (if any) and update your financial and organizational policies accordingly. In essence, get all of over administrative housekeeping in order so you can start clean and hit the ground running in 2015.

 For any further questions, contact PracticeForces today!

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Source: MGMA, Physicians Practice

 

Topics: Medical Billing, Improving Your Practice, Specialty Practice

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