Keeping your practice’s finances strong is at least as important as managing your own personal finances properly.
Remember, having a solid financial foundation as a practice helps you whenever you experience risks, changes in your patient load and any other unpredictable occurrences. It helps to ensure that your practice will be there for your patients even through economic challenges and health policy changes.
In other words, knowing how to manage your chiropractic finances is a key part of running a practice. In this article, we’ll talk about some strategies you can apply today to keep your practice finances in good shape.
Get staffing right
First, it helps to look at one of your clinic’s biggest expenses–or investments–your team members. For some practices it makes sense to outsource billing and other functions to save money. Keep in mind, though, that at many offices it may actually be more cost-effective to hire in-house staff than to outsource important tasks. You’ll have to carefully weigh the pros and cons of hiring against your needs to find the right solution for you.
If your team members aren’t probably trained or educated about managing clinical finances, don’t leave the task to them, either. Maintaining compliance with the law and also managing the important tasks of keeping practice finances organized may be too much to expect of your chiropractic assistant, for instance. And activities such as bookkeeping and account management are probably better done with help from an accountant in many cases.
Financial planning
Running a busy practice is only possible if the bills are paid on-time and if money is allocated correctly. You need to have a solid plan for your practice’s finances. As appropriate, you should also seek the help of a financial professional who’s familiar with how small business and healthcare practice finances should be managed.
You’ll want to plan for current expenses, anticipated major purchases, ongoing maintenance to your building (if applicable), staffing costs, software subscription costs, etc. Knowing where your finances stand right now can help you with future planning and figuring out your marketing plans if you want to expand your practice to see more patients. You may decide that your finances today mean you’ll need more business tomorrow–from there, you can make adjustments accordingly.
Here are some financial basics that you may find relevant for your clinic:
- Quarterly and Monthly chiropractic finances-Many businesses break up their year into quarters for financial planning purposes. As you start thinking in terms of your business this way, you can plan ahead for what you want from future quarters, and also compare certain times of the year with previous years. You’ll probably be thinking in terms of months as well, since many bills are calculated and paid that way.
- Budgeting-A budget based on past expenses and revenues helps you decide what you can and can’t afford as well as plan for seasonal changes in business. Revisiting your budget often can help you see your progress and visualize any changes you need to make.
- Paying It Forward-As you encounter leaner months, having some operating savings to use from better months can help you smooth-out your take-home earnings and bill payments. Generally, many clinic expenses are fixed and consistent every month but income and revenue can vary. Create more stability in your own income by finding a comfortable amount you can pay yourself each month that’s consistent-regardless of how great or how lean a particular quarter is.
- Loans-Of course, you do want to use debt sensibly, but loans can be an invaluable source of important capital to create a new practice or expand an existing one. Read the terms carefully and shop around. That repayment will probably be an item on your budget for a while, so you want to find the right fit for your needs.
Business mindset
While many doctors don’t primarily think of themselves as business people, in reality, you are one. Many chiropractors love serving their patients and don’t always want to focus on the numbers–but it’s this business mindset that helps your practice survive and really thrive.
We all have to pay our bills out of necessity, of course, and at your practice the same principle applies. You also have to think of funding your own salary, retirement, and benefits.
Shouldn’t the people who care for our communities’ health also be taken care of? You deserve a financially strong practice!
Sources
- Stewart, JK. “Small Ways To Stay On Top Of Medical Practice Finances.” Physician’s Practice online. http://www.physicianspractice.com/revenue-cycle-management/small-ways-stay-top-medical-practice-finances/page/0/1. Published: May 2014. Accessed: April 2018.
- AAAAI. “Practice Finances.” American Academy of Allergy Asthma & Immunology. http://www.aaaai.org/practice-resources/running-your-practice/practice-management-resources/practice-finances-coding.
