Opening your own practice is an incredible milestone in any physician’s career. But running a business, especially a medical practice comes with its own set of financial challenges. If running your practice feels overwhelming here are some tips on how to manage your medical practice’s financial challenges.
Build a Team
You don’t have to worry about all of the finances of your medical practice by yourself. It is worth it to build up a great team of financial experts that can guide you every step of the way. When you start building a financial team for your business there are a couple of types of people you’ll want to work with.
First is an attorney. An attorney can help you handle any contracts and offer legal advice for your practice as it continues to grow and develop. Next, your banker or financial backer will be able to help guide you and your business’s finances. Working with bankers or supporters also allows you to understand where your money is coming from and where it’s going, so you don’t run into any surprises down the line. And lastly, you’ll want to work with a CPA. An accountant will be the person that can keep track of all of your business’s finances when you have to run other parts of the business.
You can learn more about everything that goes into building a great team of professionals for your medical practice with resources from Physicians Thrive.
Separate Your Expenses
When you first start a business, it can be easy to put all of your expenses into one bucket. To avoid any financial challenges for your medical practice, it is in your best interest to keep all business and personal expenses completely separate. Business expenses for your practice will be tracked and taxed differently than your expenses. You also cannot cover personal expenses through any business accounts. Keeping these separate from a business bank account is a great way to keep track of the expenses for your business. When tax season rolls around, you can use your business expenses for potential tax write-offs or breaks as well. So having them tracked in one place can make all of your business taxes much simpler when the time rolls around.
Utilize Management and Billing Systems
One way to make sure you are getting all of your bill payments from patients is to use management and billing systems at your practice. Management systems can integrate office information along with operations in your facility to help you see any bills or expenses that you need to be across. Having a management and billing system will automatically send bills to patients that they can pay through the system. These systems will also track all information that you may need to bring up. Overall using management and billing systems will help you not only keep your financials organized but the entire operation of your business.
Third-Party Billing Solutions
If you have a very small practice, billing and claims can become time-consuming. If you find that tracking the billing system yourself and trying to work with insurance companies on claims is taking up all of your time, you can use third-party billing companies. These are companies that will do all of your billing and claims on your behalf. You will have to make sure when looking for third-party billing companies that you find one that aligns with medical practice needs. You want to work with a company that will make your billing needs easier rather than more confusing and cumbersome.
Track Income and Salaries
When you run your practice you have to track not only the salaries of your employers but also the cut that you take. You should be able to agree upon a set percentage to pay yourself based on your revenue and income. This means that your income could fluctuate from year to year depending on how much business you are doing. Or you decide that you have a fixed income. Once you figure out the amount you will be taking and how it lines up with your financials, you’ll also need to keep track of the salaries you are offering your employees. You want to make sure they are fair and also line up with the amount of money your business is bringing in. You can always set up discussions with your financial advisors to ensure your income distribution is on track for you, your employees, and your business.
Running a medical practice is hard work, but can pay off in the long run. Instead of getting overwhelmed by financial challenges, make sure to work collaboratively with people that can help you. Setting up your practice for success from the start will allow your financial challenges to be much more manageable.