Bookkeeping tasks can be tedious and repetitive. They can require significant time and concentration, taking you away from the essential duty of caring for your patients. Fortunately, you can use many different tools to help you efficiently manage your bookkeeping processes, making it a much simpler and less time-consuming endeavour.
Bookkeeping Best Practices
Leverage your practice management software for data
Several practice management software programs can help make your chiropractic clinic’s bookkeeping easier. Software like the Jane App and Cliniko contain revenue, billing, and payroll-related data necessary for your bookkeeping processes.
When selecting a practice management software, you should ideally choose one that can integrate with your accounting software. Unfortunately, many of the programs available don't have this capability. However, you can still generate all necessary reports and export the data into your accounting software.
It is also important that your bookkeeper is comfortable navigating the platforms you are using and can run the proper reports to meet your accounting needs.
Migrate to a Cloud-based Accounting Platform
Many chiropractors start their business by relying on Excel or desktop accounting software to manage their bookkeeping. This is not the best practice because Excel is prone to errors, and desktop accounting software lacks the flexibility for collaboration with external users and increases the risk of data loss in an IT disaster.
Cloud-based accounting software such as QuickBooks Online or Xero is a better option. Cloud-based programs offer your practice the advantage of storing your vital financial data safely and securely in the cloud. You can access this information from anywhere and on any device, giving you clear visibility of your finances at all times.
Migrating to a cloud-based accounting platform is one of the key steps to optimizing your bookkeeping process. Many chiropractors start their business by relying on Excel or desktop accounting software to manage their bookkeeping. This is not the best practice because Excel is prone to errors, and desktop accounting software lacks the flexibility for collaboration with external users and increases the risk of data loss in an IT disaster.
Cloud-based accounting software can reduce your IT costs since no hardware maintenance or upgrades are required. It will keep you connected to your business even on the go. If you need to approve payments or send invoices to customers, you can do so from wherever you are rather than waiting until you are back in the office.
Cloud-based accounting software also has the ability to integrate with other third-party software to allow data to sync between multiple systems, such as your payroll software, expense management software, and payment platforms.
Capture Expenses with Expense Management Software
There is no denying that your chiropractic practice will go through a lot of supplies and require a great deal of equipment. These transactions must be recorded correctly in your accounting software as part of the bookkeeping process, but this can be a time-consuming endeavour. No one enjoys spending their time on data entry when they could be treating patients or focusing on ways to grow the business.
Thankfully, expense management software like Dext Prepare can help you optimize your expense management process. Dext Prepare allows you to take a snapshot of your receipts and invoices. The program extracts all the vital information from these documents and stores it for you, meaning you don't need to keep the paper copies. Dext Prepare will then export the transaction data to your accounting software, helping you keep your records current. Your source documents are also stored in the cloud, making them easily retrievable if you get audited.
Electronic Payments for Vendor Invoices
Paying by cheques can be costly, and mailing them out means they can take a long time to arrive and risk getting lost in the mail. Credit card payments can also be a hassle, leading to hefty processing fees, which some vendors may require you to pay.
A simple way to streamline your payables process and ensure you stay paperless is to use Plooto. Plooto can pull the payables listing from your accounting software, and you can decide which payments to make and when. You can choose to pay your vendors via EFT payment, and once the payment is complete, Plooto will reconcile it in your accounting platform, so you don’t have to. Not only will this save you time and money, but it will also allow you to keep your focus where it belongs: on treating your patients and running your practice.
When you look for ways to work smarter and not harder, your bookkeeping process will become more straightforward and easier to manage, and you will also have access to more reliable financial data.
Bookkeeping Tips for Success
Have a separate personal and business chequing account
When your practice is small, combining your personal and business finances may seem tempting. This is a mistake that many business owners make, and it can complicate your bookkeeping process considerably.
Not only will having combined accounts make it harder to track the success of your clinic, but it will also make tax time a nightmare. Plus, when your finances are mixed with those of your clinics, it looks very unprofessional to lenders and future investors.
Keep your books current
Bookkeeping is an important task because it keeps you informed on the financial health of your practice and gives you the facts you need to make crucial business decisions.
Typical bookkeeping tasks include:
- Recording and coding revenue and expenses
- Making cash deposits
- Sending patient and insurance providers invoices
- Paying suppliers, vendors, and contractors
- Reconciling insurance billing to accounts receivable
- Reconciling your bank and credit card statements
- Generating financial reports like profit and loss, balance sheet, and cash flow statements
It is crucial to ensure that all of these tasks are completed regularly so that you always have access to accurate and timely financial information on your practice.
Monitor your cash flow
Cash flow is the lifeblood of your business. It's what allows you to make sure your clinic can meet its financial obligations.
One of the best ways to manage your cash flow is with a budget. An adequately created budget will allow you to ensure there is always enough cash on hand to pay your employee's salaries, cover the cost of your equipment, pay rent on your clinic space and cover all other expenses your business incurs.
Make sure that you consider that certain times will be busier than others and that your cash flow situation will fluctuate. You need to budget for these uncertainties and create a cushion to ensure you can always cover your expenses.
Stay on top of your collections
Insurance billing can take a toll on your cash flow because insurance providers may take considerable time to pay your claims. You will also have to deal with denied claims and have to reach out to your patients to have them pay instead.
Review your receivables and follow up on outstanding payments or denied claims every two weeks. Ensure that you are proactive about this to keep your cash flow healthy.
Review your financial statements regularly
Regularly reviewing your financial statements will provide you with constant insight regarding the health of your business. The three most important statements to review are:
Profit and Loss: Your profit & loss (aka income statement) will show you your revenue, expenses, and profits (or losses) at the end of every month. Reviewing this report will allow you to see which services make the most income and whether you have over or under-budgeted for your expenses. It will also give you a good indication of how you can improve your bottom line.
Cash Flow Statement: Your cash flow statement will identify the total money flowing in and out of your business over a specific period. Many cash flow problems arise from a mismatch between money entering your business and when it leaves. By reviewing your cash flow statement, you can track the money moving in and out of your business and spot potential cash flow problems before they arise.
A/R Aging Report: This report will show you all of your unpaid invoice balances and the length of time they have been outstanding. Reviewing this information regularly and following up on outstanding invoices is important because these can harm your cash flow. You must always ensure you have sufficient cash on hand to pay your staff and keep your practice afloat.
Bookkeeping can be time-consuming and costly, but it doesn't have to be. By staying current on your financial information, leveraging cloud-based technology, and enlisting the help of trained experts, you can ensure that your books are always accurate and current.
Accounting Tech Stack for Chiropractors
Tools to make bookkeeping for your practice easier.
QuickBooks Online
QuickBooks Online is one of the top accounting software currently available. This cloud-based accounting software safely stores all your crucial financial data in the cloud, meaning it can be accessed from anywhere on any device.
QuickBooks Online is an excellent option for smaller-sized practices and allows you to issue invoices to patients and insurance providers and manage all your billing needs. It can track your revenue and expenses and allows you to customize your chart of accounts to track revenue from insurance billing, patient billing, and contractor fees, to name a few. You can also quickly generate your receivables and payables listing and run financial statements to monitor your practice's performance.
Another excellent advantage of using QuickBooks Online is its ability to integrate with other third-party tools like Dext Prepare and Plooto to streamline your bookkeeping process further.
Jane App
If your chiropractic practice is larger, you will likely require practice management software to handle scheduling, billing, and invoicing. The Jane App is a cloud-based practice management software and the perfect solution for all your chiropractic practice needs. Its best features include online appointment booking, staff scheduling, and electronic charting.
The Jane App also offers specific accounting features such as:
- Insurance billing - This allows patients to provide their insurance information before their appointment, and you can determine what their policies cover. You can also send patient claims directly to their insurance provider immediately after their appointment.
- Patient billing - The Jane App allows you to collect your patient's credit card information when they book an appointment and charge any outstanding payments directly to their card. This can significantly improve your clinic's cash flow.
- Manage receivables - By allowing you to track unpaid invoices and denied claims easily, the Jane App allows you to stay up-to-date on your receivables.
- Generate reports - This tool allows you to generate various reports, such as billings by chiropractors. This can better help you manage payroll or contractor revenue payments.
Payworks
Payroll is one of the main expenses for every chiropractic practice, and having reliable payroll software can simplify your payroll process tremendously.
Payworks is a cloud-based payroll software often recommended to clients due to its ease of use and ability to automatically calculate and remit payroll deductions to the CRA on your behalf. This ensures that your practice remains compliant with all payroll legislation.
Dext Prepare
One of the biggest tasks in bookkeeping is keeping track of your business receipts and invoices. Manually entering this information can be very time-consuming, and storing the documents in a physical filing cabinet for record-keeping purposes can lead to missing documents and the risk of destruction in a mishap.
Dext Prepare can solve these issues and speed up your bookkeeping process. With just the click of a button, you can snap a picture of your receipts and invoices, uploading the information directly to the cloud. Dext Prepare will automatically capture crucial data from these documents, meaning you don't have to deal with the hassle of keeping the hard copies or manually entering the data they contain.
HubDoc
HubDoc is another excellent document storage platform. Your bills and bank statements can be accessed from this site, which easily syncs with your accounting software.
HubDoc uses OCR technology to retrieve crucial information from your clinic's bills and invoices, eliminating the need for manual data entry. Not only does this save you time, money, and a great deal of trouble, but it also means that you no longer need to store paper copies of all your documents and never have to worry about data entry errors.
Plooto
One of the keys to maintaining a good relationship with your suppliers is ensuring you pay them on time. Plus, many suppliers will offer you early payment discounts, which can reduce your expenses and help you better manage your cash flow. Plooto is an excellent tool to help you stay on top of your payables.
Plooto works by automating your accounts payable process by seamlessly sending out payments to your suppliers when they are due. Plooto will send out a payment approval, and once it is fully approved, proper payment will be sent to your supplier. This eliminates the hassle of writing and mailing cheques and ensures that you are never late paying an invoice again.
Why Chiropractors Should Outsource Their Bookkeeping
Here are the top seven reasons why chiropractors should outsource their bookkeeping:
Stress-free bookkeeping
We could all use less hassle and stress in our lives, especially regarding our business's finances. When you choose to outsource your clinic’s bookkeeping, your outsourced bookkeepers will ensure that your books are up-to-date throughout the year effectively and accurately, saving you the trouble.
An outsourced bookkeeping team can help you accurately record revenue from different services, insurance billing, and patients who pay upfront. They will keep track of your expenses, allowing you to see exactly where your cash is going and in which areas you might be overspending. Plus, they can keep your accounts receivables current while awaiting direct billing payments from insurance companies.
Consistent and streamlined bookkeeping will help you better understand how your clinic performs throughout the year. This will give you insight into your profit margins and help you keep your staffing costs in check.
It is also important to note that your outsourced bookkeeping team will help eliminate the stress that goes along with tax season. Not only can they help you stay up-to-date with your sales tax obligations, but they will also provide your accountant with the accurate information they need to easily identify all tax deductions for your business.
Cash flow visibility
Outsourcing to a bookkeeping team can provide you with visibility on the cash flow of your overall practice.
By keeping your books current and accurate, you can monitor the cash flowing in and out of your business. You will also be able to determine whether your cash flow is trending positively or negatively.
You always want to be able to identify potential cash flow issues before they arise and ensure that you invest your cash into areas of the business that will increase your profitability.
Monthly financial statements you can rely on
Outsourced bookkeeping will provide you with the crucial financial reports that you need to understand your clinic's ongoing financial health to make informed decisions for your business.
At month-end, your outsourced bookkeeping team will generate a financial statement package, which includes your balance sheet, cash flow statement, and income statement. These reports contain the information that you require to make better business decisions.
Your outsourced bookkeeping team can also work with you to create custom reports specific to your unique business's needs. They can help you track the profitability of each new and recurring patient, compare your budget versus actual numbers and examine the overall growth of your practice.
Scalability
If you are operating more than one practice, understanding the performance of each location is essential. With an outsourced bookkeeper, you can customize the types of accounting tasks that you need to fulfill each location’s requirements.
As a bonus, your outsourced bookkeeping firm comprises an entire team of skilled bookkeepers who have the resources to scale along with your clinic. You don’t need to worry as your clinic experiences more transactions and an increase in patients. Your outsourced bookkeepers can easily handle the added volume of work.
Access to bookkeeping experts
There is a lot that goes on in managing a chiropractic clinic. You are focused on delivering excellent service, acquiring new patients, and managing insurance billing, and you are good at what you do. So is an outsourced bookkeeping firm. They are comprised of well-trained personnel specializing in bookkeeping and other back-office accounting services.
An outsourced bookkeeping firm also has knowledge of utilizing cloud-based accounting software and other cloud-based tools. This will help you streamline your chiropractic clinic’s bookkeeping process and securely store your documents in the cloud.
At Enkel, we can assist you with your bookkeeping tasks and help you manage your payroll needs.
More time on your hands
Bookkeeping can be a time-consuming and lengthy process. When you outsource this task, you ensure that a professional and experienced bookkeeper puts in the time required to keep your books accurate and up-to-date. This will free up more time from your busy schedule because your patients are your priority.
Cost-effectiveness
Most businesses aren't aware that it's significantly cheaper to outsource than it is to hire in-house. When you outsource, you get the benefit of having a trained professional personally take care of your clinic's finances without paying the added expenses of training a new staff member and paying their wages, benefits, and vacation time.
Outsourcing is one of the best ways to ensure your bookkeeping is kept accurate and current. Not only will you always have access to reliable financial data, but you will save yourself a significant amount of money and hassle as well.
Contact Enkel today if you want to outsource your chiropractic clinic’s bookkeeping tasks. We can help you with all the daily bookkeeping your practice requires and added services like payroll management and collections. At Enkel, we make it our job to ensure you have access to the most accurate and current financial information, setting you up for the best possible success.
