There are many perks to having your own medical practice—the freedom to limit clients, choose pricing, and set your own schedule, to name a few. With that freedom, however, you are also the boss of your own finances. It can be difficult to make time to keep up with accounting and billing. You are likely very busy, are intimidated by finance, or you simply have no interest. After all, you did go to school to get a medical degree, not an accounting degree. However, it’s of utmost importance to keep a handle on your finances. Below are some tips on how to keep on top of your accounting in your medical practice.
- Keep Records. Yes, you need your bank statements. However, you also need to rake up any detail you have to account for money coming in and money coming out. Review your appointment records for the month, and keep receipts ready in a folder. Divide these folders by month. You can even scan your receipts and keep them online. More and more transactions are going paperless, so if you receive digital receipts, keep them in a safe folder on your computer that is backed up in case something should happen. This will also keep you safe should a patient claim you wronged them financially or if you made a mistake that you must rectify.
- Remember to Take out Taxes. Never defer to take out taxes until later. You are already a busy medical practitioner, so why give yourself the extra burden later by putting off taxes? Avoid errors and a lump sum bill at the end of the year so that you remain stress free and financially stable. On the flip side, learn how to get the most out of your tax refund. There are plenty of tax deductions available for medical practitioners that are highly valuable. For instance, as a practicing doctor you will have to complete a particular amount of continuing professional education in order to keep your registration, and some have to pay more than others. Lucky for you, you can deduct all of the incurred expenses—materials, fees, textbooks, and computers. Even small fees like photocopying costs can factor in. In addition, if you bought any materials out of your own pocket such as wireless internet, pencils, cotton balls, you name it, you can likely put it down as a deductible. So keep those receipts; not only will it be best to keep your accounting in order, but you can end up winning a lot back!
- Hire a Professional. As your practice grows, so will the financial needs of your business. Like any business, sometimes complex accounting will have to be made. If financing is not your forte, or if you would like to get it off your mind and off your plate, do some research to find an accountant. Once your business grows to a considerable size, you will want to devote your time to the actual practice. You can hire an accountant or financial advisor who can periodically check in to make sure the account is balanced, whether taxes are being paid correctly, and whether payroll is being processed efficiently and without error. They can also educate you and give you tips on how to handle your financial future. A financial advisor can project the success of your business in the local and national market, and help you capitalize on those gains. You may also consider using a CPA, these certified individuals are the masters of their trade; they’ve passed a strenuous exam covering all manners of accounting practices, often hold master's degrees, and are well-versed in record keeping.
- Educate Yourself. If you have the spare time, you may learn better by educating yourself. There are many resources out there that can help you understand how to better organize your financing. If you feel this route gives you more confidence, attend seminars or read texts that can simplify accounting methods and strategies for you. You may even be interested in CPA review courses so that you can better prepare yourself to be more successful in your practice.
Maintaining your business finances is an integral part of medical practice success, so consider these strategies and leave your business well-poised for a financially healthy year in 2017.