Staying within your physiotherapy clinic's budget can be a challenge. With increased overhead, expanded service offerings, more stringent reimbursement guidelines, and other factors, your expenses can often be enormous and will continue to grow if not monitored.
Cutting costs should never come at the expense of quality patient care. Instead, it would be best to reduce expenses by increasing efficiency and productivity within your team and cutting back on unnecessary costs.
1. Track your expenses closely
One of the first steps to reducing business expenses is to have complete visibility into your business' costs. Here are some options:
- Implement accounting software like QuickBooks, FreshBooks, or Xero, which are designed to help small businesses manage finances. These platforms can automatically categorize expenses, generate reports, and sync with bank accounts and credit cards. Be sure the software integrates with other systems (e.g., point of sale, payroll) to streamline data collection and reduce manual entry errors.
- Open a business bank account and get a business credit card to separate personal and business expenses. This simplifies bookkeeping and tax preparation. Regularly review bank and credit card statements to track spending and catch unauthorized transactions early.
- Regularly update your financial records to keep track of expenses and monitor cash flow. This can help you make informed financial decisions. Use apps like Expensify or Receipt Bank to scan and store receipts digitally. These tools can also categorize expenses. They should integrate with your accounting software.
- Develop a detailed budget that includes all expected expenses. Regularly compare actual expenses against the budget to identify areas where you may overspend. Use historical expense data to forecast future spending and adjust your budget accordingly.
- Use dashboards within your accounting software to get a quick, visual representation of your financial status, including expenses. Generate and review detailed expense reports to understand spending patterns and identify potential savings.
Suppose you are not managing your bookkeeping properly and tracking every expense your clinic incurs. In that case, you won't see where you can trim back or identify tax deductions you aren't maximizing correctly. You need access to reliable historical data to create a budget and forecast for better planning expenses going forward.
2. Gain efficiency through technology
To improve your clinic's bottom line, you want to make sure your physiotherapists and administrative staff are working efficiently and not spending their time on manual data entry or unnecessary paperwork.
Instead of using desktop software, move to comparatively cheaper cloud-based software. With advancements in technology, numerous software tools can streamline your workflow.
For example, the Jane App is excellent for automating your clinic's scheduling, billing, and insurance claims. It makes it easy for therapists to capture patient data and set up billing for patients and insurance providers using the app.
QuickBooks Online is one of the most popular cloud-based accounting software for small businesses. It has most of the basic accounting features required by your clinic, allowing users to collaborate and access financials while on the go.
You can also use tools like Dext Prepare to extract essential information from invoices and upload transactions to accounting software, saving you significant time on manual data entry, all while creating an easy-to-follow audit trail.
A program like Plooto can simplify your vendor payment and payables process. You won't need to worry about writing and mailing cheques any longer. Using Plooto, you can authorize and schedule electronic payments to your suppliers. This ensures they are paid on time and allows you to take advantage of early payment discounts.
3. Outsource non-core business tasks
One of your highest costs will come from your payroll as a physiotherapy clinic. You will have therapists and administration staff who all need to be paid.
You will also need to manage other tasks to keep your clinic afloat. Bookkeeping, marketing, and HR must be handled; however, they are not necessarily full-time tasks. Hiring an in-house bookkeeper or marketer might not make financial sense for your clinic.
Outsourcing is an excellent way to reduce business expenses while still having a dedicated resource to manage these tasks. Plus, you won't need to pay CPP, EI, or deal with vacation pay and benefits. You also don't need to worry about recruitment or training costs.
By outsourcing your bookkeeping, you can rest easy knowing that your books are up to date while you focus on running your clinic.
4. Make use of early payment discounts
The amount of supplies that your physiotherapy clinic requires is almost endless. You must order supplies like kinesiology tape, heat packs, foam rollers, resistance bands, and equipment to enhance patient recovery. You might have to order supplies from various suppliers, and keeping a good relationship with them is crucial for your business.
Many of these suppliers might offer early payment discounts that could reduce your invoices by one to two percent. If you have sufficient cash to handle these early payments, these discounts can significantly save money over the long run, especially with bulk purchases.
However, you will need to stay updated on your invoices and accounts payable to maximize these discounts. You must also save and reduce your expenses as much as possible.
5. Analyze your fixed costs
Fixed costs are often neglected because they are recurring and stem from long-standing relationships with suppliers and vendors. However, these costs shouldn't be ignored.
You should re-evaluate these fixed costs at least once a year to determine if you are getting the best possible value from your provider or if there are ways that these costs could be further reduced.
By keeping a close eye on your clinic's expenses and evaluating them frequently, you can find many different ways to save without having to cut corners when it comes to patient care. Even a minimal amount of savings each month can significantly reduce your expenses over time.
If you would like to enlist the assistance of a professional bookkeeper to help manage your clinic's finances, Enkel is here to help. We have a qualified team of skilled and experienced bookkeepers who can help your clinic gain better financial visibility and assist you in meeting all of your future goals.
How We Select and Evaluate Our Recommended Software
We thoroughly research and test the apps we include in our regular workflow for Client bookkeeping services. After deciding on criteria for evaluating the software and then researching the app itself, we tested the app, noting its strengths and weaknesses. We then work with the app for at least a few weeks before deciding whether to recommend it to our readers. We use the software as it was designed for its intended tasks. For a detailed walk-through of how we select and evaluate software, please see the details of our process.
