Owning your medical practice comes with its perks! From limiting clients to choosing your schedule, you practically get to be your boss. But neither formal medical education nor your passion for medical practice could prepare you for the associated financial problems.
Like other small and medium enterprises, medical practitioners also face the added burden of adhering to accounting and billing norms. Getting the accountancy process right is the prerequisite to running a successful business.
You might be lacking formal financial education or intimidated by the bookkeeping process, or simply not interested. Whatever the case may be, you need to maintain proper financial records. Below are some tips on how to keep your accounting books healthy:
1. Maintain detailed records
Keep a detailed record of money coming in and going out of the business. A bank statement can provide you with a summary of non-cash transactions conducted. Maintain receipts of cash transactions, preferably sorted according to months. However, it is essential to maintain digital versions of these to aid the work of the accountant. Maintain backups of all these online receipts and create additional cloud copies to ensure data availability.
2. Timely collection of taxes
Remember to collect taxes whenever applicable, be it at the point of sale or when employee payrolls are generated. Do not postpone collection of taxes till the end of the year, as this can only lead to greater hassles during financial year-end.
While deferring tax payment might be tempting either to save time or to gain temporary access to additional money, it causes more errors in the long run. However, medical practitioners should also consider the tax exemptions means and components of the tax return to gain the most out of tax filing.
3. Financial documents
With the expansion of your practice, the associated financial complexities will also increase. Maintaining regular cash flow statements, profit and loss statements, and balance sheets are mandatory to check on the overall financial health of your practice.
To ensure proper financial recording, hire a professional for the same. Doctors can also fund their daily expenses or cater to a newer patient base with a loan for doctors.
4. Automated invoicing
Like any other form of business, generating revenue is important even for medical practitioners. However, keeping track of invoices should also be considered equally important to ensure the financial health of your practice. An easy means to achieve this can be by automating the invoicing process. But it is in the healthcare professional’s prerogative to ensure outstanding invoices are met promptly.
The best way to overcome your adversity towards accounting is by learning about it. Try to invest some time in educating yourself on how to organize your finances better. Attending accountancy seminars and reading self-study materials can provide self-confidence and also simplify accounting for you.
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