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Medical Billing Management Software

Effective financial management for your medical practice

Effective financial management is the first step to success for any business, including your medical practice. By analyzing your financial data, you can give your business an advantage in terms of market-share, operational-efficiency, and profitability.

The financial management of your medical practice may understandably seem daunting. You can, like many entrepreneurs in your position, be running skeletal staff without much to spare for admin. With the right strategies in place, you can have a great financial system and not break the bank. Or have your poor admin work overtime every night for that matter.

Here’s how to go about it:

Decide: Outsource or do it yourself

Before you shake your head at this insanity, the general answer is yes. It is possible for a person without an accounting qualification to do a bit of financial management, especially if it is a small business. If you do however decide to go at it on your own, invest in knowing the basics.

If you decide to outsource, you’re chosen service provider should be full scale. Having every element of your financial management taken care of under one roof will make the overall cost lower. Secondly make sure your chosen provider has experience in your industry.

That is where medical billing companies comes into play. While a Medical billing company might be slightly more expensive, they can also save you unnecessary expenses in the long run and improve your cash flow drastically. They have knowledge of claims that needs to be send to medical aids, the different codes, PMB’s etc. that can be claimed from the medical aids that improve the practice cashflow. They could have more knowledge about other financial management aspects that can improve the running of your medical practice, tax implications, staff management, debtors etc. It will also be cost effective if you make use of a billing company that use their own billing software programs.

Stay Compliant

No good can come from holding on to the tax man’s money. Besides the penalties and fees that accrue, it’s definite in nature. That makes holding onto it imprudent because you know it will have to be paid, only you stand the risk of paying it as a larger amount. For this reason, you need to stay aware of all the taxes that accrue to your business and amounts due.

Stay ahead of payments

A staggering 82% of businesses fail because of poor cash flow management. And while you are thinking ‘but my business is profitable’, you can be part of that statistic. Simply put, profit is excess of your revenue over your expenses. Cash flow on the other hand refers to the movement of liquid funds in and out of your business. Because of credit sales, you could have a very profitable business but no liquid cash coming in. This is a very big problem because without cash you cannot pay your own debts. When the bills come through your provider does not care about your profit or who owes you how much, they just want to get paid, for this reason you need to make sure to stay ahead of payments.

This is particularly important for a medical practice where there are several payment streams. Some patients pay directly, some use their medical aid, some a combination of both. It is important to make sure all financial obligations to the business are met. Make sure to prioritize creditors whose debts are falling due first, to not miss payments.

Manage your overheads

The distinction between needs and wants is perhaps most pertinent for a business. After all, successful business is about maximizing revenues and minimizing costs. To minimize costs, a business needs to ensure it limit its cost centers to necessities. This includes structuring the business in a manner that reduces expenses.

Always separate your finances

Running a small business, as most medical practices tend to require a lot of discipline for proper financial management. Many small business owners tend to struggle to see themselves as a separate entity from their business. Because of this, they don’t have urgency in making sure the business’s financial resources are separated from theirs. Before long expenses are being paid side by side for the business and personal ones. Some owners even entirely forget to pay themselves anything and live off business funds.

As a doctor your job gives you the most satisfaction when you are helping patients than when doing pesky admin. Unfortunately, financial management falls on the pesky admin end of the spectrum. With the right strategies in place, you can simplify much of this task. Not only that, but you can also make sure your business greatly benefits from it.

Posted by CredEBill Billing Solutions on November 30, 2021
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