Determining the Right Level of Accounting Support for Your Medical Practice
Many doctors, dentists, and other healthcare providers struggle to keep up with the challenges of running their practice. Accounting and bookkeeping tasks are crucial to helping medical offices operate more smoothly. Thus, whether you leave bookkeeping and accounting to outside providers or hire expertise in-house, you want to increase operating efficiency, improve cost containment strategies, and maximize the collection of receivables.
Accurate cost accounting and management ensures that the prices charged to patients cover the continually rising cost of medical equipment, maintenance, and essential supplies, such as swabs, hypodermics, and latex gloves. By developing internal controls and streamlining your overall operations, you can begin to better manage cash flow. Additionally, getting on top of complex tax issues and exploring ways to produce easy-to-understand financial statements will help you stay on top of monthly finances.
When assessing your practices accounting practices, ask yourself two important questions:
- Do you understand and have the skills and knowledge to make advantageous decisions related to the increasingly complex situations in which you find yourself?
- Should you oversee office managers more closely, sign your own checks, and scrutinize accounts, or should you hire a professional to evaluate your practice and prepare a comprehensive financial assessment?
As with any small business, how you handle your accounting practices is an important factor in the success of your practice, which may not be able to afford a full-time, qualified financial administrator. Finding qualified accounting assistance, therefore, should be a priority for any medical office, and you can use a number of available options.
Part-Time Accountant: Your medical office may benefit from employing a part-time accountant, who works on your premises and becomes completely familiar with the operations of the business and the accounting challenges. If the accounting workload is small enough to deal with in a day or two per week, consider employing an accountant to work a set number of hours or shifts each month to attend to the tasks.
Junior Administrative Staff: Alternatively, you may hire junior administrative staff to take care of the basics, and contract an outside accounting firm to provide oversight, cash flow statements, monthly financial reports, and year-end closing of the books.
Experienced Tax Consultant: Preparing your annual tax returns is specialized work, and a medical office can benefit from the use of an experienced tax consultant to prepare tax returns that optimize your tax liability. Medical offices, especially those serving low-income patients, may be able to deduct a variety of business expenses, which will benefit the profitability of your practice.
Accounting Software: Consider purchasing accounting software specifically designed for medical offices. Some of these program enable you to monitor patient visits and fees, determine supplies purchased and in stock, evaluate costs, and record patient and supplier contact information.
A variety of accounting services provide billing and coding support, schedule fee negotiations with payers, and conduct operational policy reviews, all while developing financial controls for management reporting. Among the many common accounting, tax, and financial advisory issues and challenges that doctors, dentists, veterinarians, and other healthcare providers deal with on a day-to-day basis are billing, payables, receivables, bank reconciliations, and general ledger entries. All of the following services fall under the umbrella of accounting:
- Financial statement preparation
- Bookkeeping and payroll
- Accounting software set-up, support, and training
- Business tax planning and strategies
- Personal financial statements
- Business loan assistance and business plan development
- Budgets and financial projections
- IRS problem resolution and tax opinions
- Controls analysis and practice valuation
- Profit and loss analysis
- Budgets and cash flow management
- Wealth accumulation and retirement planning
Insurance and Tax Compliance
Medical practitioners face myriad financial challenges when growing their practices. Being able to quickly identify financial or operational issues will make your practice more profitable. But managing the finances of healthcare organizations with expert bookkeeping and accounting can be particularly difficult, mainly because of the various payments received from the many different types of insurance companies and patients. Another time-consuming but necessary task is compliance with the latest federal and state laws. Physicians and their medical practices face innumerable problems and challenges in analyzing current market changes in the medical field, especially regarding insurance, collections, and fraud prevention.
In today’s world, it’s a tough road for small doctor’s offices that need to understand the many billing and reimbursement nuances. Contact me today to learn how you can benefit from the same kind of exceptional care you offer to your patients when dealing with your finances.