Bookkeeping can be a time-consuming process. It can take your focus away from providing care for your patients and use up your valuable resources.
Fortunately, there are a few things that you can do to make the bookkeeping process for your medical practice an easier one. By implementing a few helpful tips, you can save yourself both time and money and ensure that you always have access to the most accurate and up-to-date financial information.
1. Go paperless
Going paperless is a great choice, not only for the environment but for your medical practice as well. It can save you a significant amount of money on the cost of paper and ink.
Plus, when you issue electronic invoices to both insurers and patients, it reduces the need for physical document storage and speeds up collection time, improving your cash flow.
2. Use a cloud-based accounting software
A cloud-based accounting software program is the perfect way to keep all your data secure and easily accessible. When you use a cloud-based program, you can access your financial data from anywhere and on any device, giving you complete financial visibility at all times.
Software like QuickBooks Online and Xero are excellent options, especially for smaller-sized practices.
3. Customize your chart of accounts
Your chart of accounts is integral to how your transactions are organized, and reports are presented. Many businesses start off by using a standardized chart of accounts, and as a result, they are unable to gather valuable insights from their financial statements.
Medical practices have specific income, expenses, and liabilities which need to be classified correctly. You may want to create revenue sub-accounts for different types of services, physician wages, staff wages, PPE supplies, and equipment depreciation, to name a few. Spend some time discussing these factors with your accountant before setting up your chart of accounts.
4. Leverage your EMR for accounting data
When choosing an electronic medical record system, you should look for one that can easily integrate with your accounting software. Your EMR is an essential data source for your clinic, and you should take advantage of it to gather revenue and billing data.
There are numerous EMR systems on the market, such as the Jane App, Cliniko, and Juno, which can assist you with a wide variety of different tasks such as scheduling, charting, invoicing, and billing.
5. Separate your personal and business accounts
Many small business owners make a common mistake in combining their personal and business finances. Not only can this make the accounting process a much more complicated one, but it looks unprofessional to lenders and investors as well.
When you keep your personal and business accounts separate, it makes for easier bookkeeping. There is no need to split your personal expenses from your clinic's expenses. It also gives you good visibility on your cash flow, allowing you to easily see the cash flow situation for your practice.
Plus, your accountant will have a much simpler time identifying transactions that will count as tax deductions for your business when tax season rolls around.
6. Keep track of your equipment and depreciation
Computers, blood pressure monitors, examination tables, and diagnostic equipment are all assets for your practice. These equipment are assets that should be depreciated over their useful life.
If you categorize your equipment purchases as an expense at the time of purchase, you will be misstating your costs for that month. Instead, you need to manage and track the depreciation value of all your equipment every year.
7. Set up tracking for multiple locations
If you have multiple practice locations, you need to ensure that you are tracking the performance of each individual site instead of just following the consolidated performance of all your locations.
By looking at each location's performance individually, you can compare how each is doing from a profitability standpoint and can identify areas that need improvement.
8. Hire a professional to take care of your books
Your financial data is crucial to the health and wellbeing of your practice. Because of this, your bookkeeping should be left in the hands of a trained professional.
Many practices will leave this job to the receptionist, resulting in mistakes and errors. Other practices will leave everything in the hands of their accountant at year-end. When this happens, you don't get visibility on your cash flow and can't see how your practice is performing throughout the year.
To avoid these problems, make sure that you employ the talent of an experienced bookkeeper. Hiring a full-time bookkeeper might not make economical sense for your clinic. If so, outsourcing your bookkeeping might be a better option.
An outsourced bookkeeping team will ensure that you always have good visibility of your finances and identify areas that need improvement. Plus, they will be able to scale alongside your business as it grows.
By following these helpful tips, you will be able to keep your books accurate and up-to-date all year long. It will be easy to track your financial data, and you will be able to identify areas of your business that need to be changed and areas that are ready for growth.
At Enkel, we know what it takes to manage your practice's books and can help save you both time and money. When you trust us to handle your essential financial data, we can keep you organized and give you peace of mind knowing that your bookkeeping is well managed. For more information on how we can help your medical practice, contact Enkel today.