How Well Do You Know Your Practice’s Finances?
For most providers who run a medical practice, mental health facility, or other clinical office, you are both the care provider and the business owner. When you first thought about going to school to care for patients and clients, you probably didn’t think that you would need an advanced education in finance, but when you run your own business, knowing where you stand financially is essential. Most physicians and providers don’t have hours to spend poring over financial reports, so it’s important to know which reports can provide a snapshot to make sound business decisions.
Your dashboard is a quick glance of everything happening in your practice, from how full your schedule is to your financial balances, charges, collections, accounts receivable, and accounts payable. With the right system, you can have these reports auto-generated with information from your EHR and billing system, in a convenient and easy-to-digest feed that shows you real-time data.
Provider & Clinic Summary
If you have multiple providers in your clinic, a summary that shows each person’s total charges, collections, and compensation can be helpful to identify trends and ensure that each person is working at peak efficiency. It may also be helpful to include a year-to-date comparison from the prior year so you can see things like quarterly or seasonal fluctuations, as well as variances that are over a certain threshold and can’t be explained. For example, a significant uptick in the cost of your supplies from last year could indicate the need to renegotiate with your suppliers or signal that someone is ordering things that aren’t essential to the practice.
If you work in a specialty where you rely on referrals, it’s essential that you track information about who is sending patients. Otherwise you may see a dip in revenue with no explanation and have no idea that it’s because a specific referral partner suddenly stopped sending patients your way. This report makes it easy to reach out to your referring partners to find out why referrals are down and resolve any issues that come up.
Compensation and Production
A detailed report that includes work relative value units (RVU) and collections per RVU can help you identify which procedures or appointment types are most beneficial and can also help you determine when something is off with your reimbursement rates or collections. If your RVUs remain fairly steady and your compensation goes down, you need to figure out why.
Monthly Financial Statements
Of course, you can’t ignore the monthly financial statements, which show your total revenue and expenses, as well as your balance sheet with fixed assets, debt balances, and equity. Review these with your office manager or CPA regularly and dig a little deeper to identify areas of improvement.
AdvancedMD provides clinics with the tools they need to see a full picture of their practice finances, with easy-to-read automated reports and customizable options so you get good information. Download our free technical product sheet.
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