Budgeting to Increase Practice Performance

Hey... we heard that groan. 

The one that you audibly uttered when you first saw the "B" word... but having a plan and numbers clearly laid out are critical for growth. 

Janet Burns, business manager for University Family Medicine Center, a two-physician primary care practice in Orlando, says the need for budgeting and watching overhead is not always obvious to physicians, because they don’t understand the value they can get from it.

“By looking at monthly numbers, I am able to find things that are happening that I otherwise would not be aware of,” she says. 

So we're offering up our Top 4 Tips to make this process as painless as possible. 

Tip 1 -  Create a budget reporting that suits your style and personality.

• If you are detail oriented a detailed budget may be worth the investment of time to create.
• If you prefer big picture, keep it simple. Monitor revenue and expenses. Then divide expenses into broader categories like staff compensation, operating costs like rent and utilities, marketing, equipment expense and misc.

Tip 2 - Be Proactive.

A problem is much easier to spot and to handle when it’s caught early on. A stray ember is easier to extinguish than a raging forest fire.

• Review your expenditures and revenue monthly, even if it’s just at the surface level. If there’s a red flag in a specific category, dive deeper.
• Check in with your staff regularly.
  • They are the eyes and ears of your business.
• If a service center seems to be dragging it may be worth it to pause and analyze this separately.
  • What’s the ROI on Marketing efforts for that specific center?
  • What is the close rate?
  • What is the overall expenditure to profit ratio?

• Meet with your Accountant regularly.

Tip 3 - Do your Homework.

• Before purchasing new equipment or investing in a new service line take into consideration the cost vs the return.
• Review Supplier and Vendor contracts regularly. Small variances in cost monthly can add up to big spends over the course of a year.

• Keep your staff attuned to these nuances and the negative effect they can have on cash flow. The more trusted eyes on your practice the better.

Tip 4  - Reduce your Tax Liabilities.

• Take advantage of small business tax perks like Section 179.
  
  Being able to roll existing equipment leases into new ones that include service center trainings and on-boarding makes life easier and sets your team up for success. Be sure to watch our webinar with Craig Colling, SVP of Ascentium Capital where we dive into these tactics. 

Ready to schedule your complimentary consultation?

Call us 800-908-8895 today