Bookkeeping Strategies
Bookkeeping can be an extremely time-consuming process that prevents you from committing 100 percent of your time to your patient's care.
Luckily, helpful strategies can make your bookkeeping process much simpler, help you save time and money, and provide your clinic with current and accurate financial data.
1. Separate your personal and business accounts
It's not uncommon for business owners to use their personal funds to set up their clinics. But this does not mean that you should be mixing your personal and business accounts. Doing so will make it considerably more complicated to manage your bookkeeping. Plus, it looks unprofessional if you need to show your books to lenders or investors.
When you keep your clinic's books separate from your personal finances, you can easily track your business's cash flow. You can also ensure that your assets are protected against legal action. Tax season also becomes a simpler time of year when your accountant can easily identify tax write-offs.
2. Leverage your practice management software for bookkeeping data
There are many practice management software that can help improve the efficiency of your clinic. Tools like the Jane App or Mindbody can be used for scheduling and storing patient data. They can help obtain important accounting information like billing, revenue, and payroll data.
Ideally, you would want practice management software that integrates with your accounting software. Unfortunately, most practice management software does not offer these integrations. You can, however, export your sales reports from your practice management software and import them to your accounting software.
For example, you can easily export information from the Jane App to QuickBooks Online, significantly reducing the need for manual data entry.
3. Use a cloud-based accounting software
Using a spreadsheet-based program like Excel may be tempting to handle your bookkeeping needs. However, Excel is prone to errors, which could leave you with inaccurate financial data. Switching to cloud-based accounting software can better help you manage your bookkeeping data.
A cloud-based program allows you to access all of your clinic's financial data while on the go. It is also the perfect choice if you have multiple locations and need to view how each one is performing separately.
4. Customize your chart of accounts
Your chart of accounts dictates how your bookkeeping is organized. Planning out what areas of your finances you want to focus on and measure is crucial for proper financial visibility.
As a physiotherapy clinic, you may want to consider tracking your revenue by category and, therefore, setting up your accounts to show treatment revenue and product revenue separately.
You also need to categorize your expenses appropriately. Clinical wages for physiotherapists who treat patients should be categorized under your cost of goods sold, while your admin staff wages should be placed under your operating expenses.
Talking to an accountant or bookkeeping professional will help you to understand best how your charts of accounts should be set up for your particular business.
5. Use an expense management tool
An expense management tool like Dext Prepare can maximize your productivity and simplify the entire expense management process.
You can take a photo of your receipt or invoice, upload it to the application and they’ll handle the rest. Using their Optical Character Recognition technology, critical data is extracted from these documents and uploaded to your accounting software as a transaction. The document is also saved to the cloud so you no longer need to store the physical document.
Dext Prepare minimizes the amount of manual data entry that needs to be done while leaving an audit trail for your expenses.
6. Automate your payables process
Automating your payables process not only saves you time but can also help keep your vendor relationships healthy and allow you to take advantage of early payment discounts.
To automate the payment process, you can use Dext Prepare to upload your invoices and export this data to Plooto. Plooto will remind you when payments are due and automatically arrange for payments to be electronically sent to your vendors after you have approved them. This saves time on manual data entry and eliminates the need for writing and mailing out cheques.
7. Hire a professional bookkeeper
In many physiotherapy clinics, the receptionist handles the books. This isn't usually the best method.
Hiring a professional bookkeeper with the proper qualifications will ensure that your books are managed on time and accurately. On top of entering and coding your transactions to the right accounts, they can provide you with the financial statements that your clinic requires to make timely business decisions.
You can also consider outsourcing your bookkeeping to a third-party bookkeeping firm. This will give you access to the professional assistance you require while saving you substantial money.
8. Stay up to date on your receivables.
When a patient's claims are remitted to an insurance provider, it can often take considerable time for your clinic to receive reimbursement. This delay can have a negative impact on your cash flow.
By staying current on your receivables and following up on late payments regularly, you can have better control over your cash flow. Ensure that any denied claims or late payments are followed up on promptly.
By following these helpful tips, you can speed up your clinic’s bookkeeping process, improve your cash flow, and gain timely insights into its financial performance.
Cash Flow Considerations
Sufficient cash flow is the lifeblood of your physiotherapy clinic. Without a steady inflow of cash, you won’t have the resources you need to keep your business up and running.
Fortunately, we have some tips that can help you monitor and manage your cash flow so that you always have sufficient funds to meet your goals and continue to care for your patients.
1. Send insurance invoices promptly
Physiotherapy is a benefit that insurance providers often cover, so you can expect patients to utilize their insurance coverage to subsidize or fully cover their treatments.
To make things easier for patients, many clinics offer the service of directly billing the insurance provider instead of charging the patients and having them remit it to their insurance themselves. While this is an excellent service to provide your patients, insurance companies can take some time to pay your clinic, affecting your cash flow and ability to meet your clinic's financial obligations, such as payroll.
Fortunately, there is a way to speed up the payment process. By sending out invoices as promptly as possible, you can ensure that your payments are received in a much more timely manner. You can also choose a software program, like the Jane App, to bill directly to the insurance provider using the app itself.
2. Follow up on outstanding payments
Cash is king! This means that outstanding payments that are sitting in your receivables listing don't mean anything if you don't follow up on collecting them from insurance providers and your patients. Ensure that you have a process in place for following up on denied claims and outstanding payments regularly.
Send payment reminders to patients or collect their credit card information ahead of time to simplify the payment process. You can also track your days' sales outstanding to determine the average number of days that it takes your clinic to receive payment and work towards getting this number as low as possible.
3. Keep an eye on inventory
It may be tempting to overstock items such as ice packs, braces, and wraps to ensure that there is always a sufficient supply to meet your patient's needs.
Doing so, however, can tie up a great deal of cash in inventory, negatively affecting your cash flow. Work towards finding the proper inventory levels of all supplies and monitor these to ensure you are never overstocked or understocked on any essential items.
4. Anticipate your future cash needs
Just like other businesses, there may be seasonality in your physiotherapy business. For example, busy seasons might coincide with certain outdoor sports or peak ski seasons. Building a cash flow forecast to project future revenue and expenses can go a long way in helping you determine busy and slow periods and help you prepare for them.
Your clinic might generate greater profits during busy seasons that can be set aside to cushion slower times. Also, suppose you anticipate making a large purchase at some point in the future, such as buying new equipment or opening up a new location. In that case, you want to be able to plan when you'll pay your other obligations to avoid facing cash flow issues.
5. Budget wisely
Proper budgeting is the key to success. Without a budget, your clinic is flying blind. Even if you are generating a profit, you can still quickly run into cash flow problems down the line if you don't properly manage your expenses.
Set a budget for your expenses and compare it with your actual costs to determine which areas you are overspending and why. This budget should be created one to two months before the new year, and you should closely track your expenses and revenues beforehand. This will allow you to make the most accurate budget possible.
Accounting Tech Stack for Physiotherapy Clinics
1. Jane App
This cloud-based practice management software is specially designed for healthcare offices, including physiotherapy clinics. Its cloud-based functionality makes it easy to access patient data from anywhere, even on the go. It is an excellent application for booking online appointments, electronic charting, staff scheduling, managing inventory, and billing.
The Jane App can store customer credit cards and accept prepayments or deposits for online booking, which can greatly improve your cash flow. It can also track unpaid invoices and rejected claims and generate reports such as billings by practitioner.
Insurance billing is something every physiotherapy clinic will need to deal with. Fortunately, you can use the Jane app to manage your claims and easily send your invoices electronically to the right insurer. The Jane app integrates with the most popular insurance companies like Pacific Blue Cross and Telus eClaims.
You can also collect the insurance policies from patients on the Jane app before they arrive for treatment. This lets you know ahead of time whether their policies are still valid and how much coverage they have. You can then let patients know what their session will cost after insurance. This feature is a great way to ensure your patients don't get sticker shock after treatment.
2. QuickBooks Online
Even though the Jane app has invoicing and billing capabilities, you still require accounting software to track vendor invoices and other expenses, and reconcile your bank and credit card accounts. QuickBooks Online is one of the top cloud-based accounting platforms available on the market. Unfortunately, it does not have a direct integration with the Jane app. But you can easily export sales and billing data from the Jane app and import it to QuickBooks Online regularly.
You can use QuickBooks Online to track expenses and import sales reports from the Jane app to get a more in-depth understanding of your profitability. You can also generate numerous reports like cash flow statements, profit and loss, balance sheets, sales tax reports, and payables listings. Plus, QuickBooks Online also allows the functionality to build clinic budgets and perform budgets to actual comparisons.
3. Dext Prepare
As a physiotherapy clinic, you must purchase supplies like ice packs, vitamins, braces, and other therapeutic equipment. Or you might have to pay commissions to other practitioners that work part-time in your clinic.
Your suppliers and contractors will send invoices, which your clinic must record in its accounting software and store in case of an audit. Dext Prepare can help streamline this process.
Dext Prepare allows you to take photos of your invoices or forward them to a dedicated Dext Prepare email address. The program will automatically extract the critical information on the invoice and import it directly to your accounting software. This will save you a considerable amount of time on data entry. Plus, since a photo of all of your invoices is saved directly in the cloud, there is no need to store the physical invoice.
4. Plooto
Once you have recorded your invoices in your accounting software, the next step is to pay them. Paying these invoices on time is crucial to maintaining good relationships with suppliers and contractors. Fortunately, Plooto can make this process much simpler.
Plooto can automatically pay your invoices electronically when they are due. This helps you manage your cash flow, letting you keep track of exactly how much money is flowing out of your business at specific times of the month. It also enables you to stay up-to-date on your payables listing. Once invoices are paid, Plooto will reconcile the payment on your accounting software and keep your payables current.
It also reduces the need for cheque payments, as writing and mailing cheques can be time-consuming. Even if your suppliers are located abroad, it is considerably more efficient to make online payments via direct deposit to the payee's bank account.
5. Payworks
It is prevalent for physiotherapy clinics to have therapists who work full-time and others who are independent contractors. You must withhold payroll deductions such as CPP, EI, and taxes from your full-time employees every month, but your independent contractors will handle them. Since the Jane app doesn't address your payroll functions, you need a software program to deal with this. Payworks is an excellent option.
Payworks is a cloud-based software program that can manage your payroll and automatically calculate and remit the deductions to CRA on your behalf. This minimizes the amount of work you need to do manually and ensures that you always stay compliant with your tax obligations.
Having the right tools in your physiotherapy clinic means that you can streamline your bookkeeping process, giving you more free time to focus on what matters most - your patients.
If you need help managing your physiotherapy clinic's books, we can help. We can help you streamline your bookkeeping process and provide you with timely accurate financials every month. To find out how we can assist you, contact us today.
