Doctors and other privatised medical professionals have a lot on their plate already. So why add doing taxes to the list? If you’re running a medical office, you need a bookkeeper on hand. Whether you have someone on staff full-time or you use a contractor to fill in as needed, bookkeeping services for doctors are crucial to managing revenue and staying compliant with government regulations.
If you’re currently asking your front desk staff to handle the books, keep reading. Let’s talk about how a dedicated bookkeeping service for a medical practice can be a game changer.
What is the purpose of bookkeeping in a medical practice?
The benefits of bookkeeping in the medical office can’t be overstated. In order to continue offering the best possible care for patients, your practice must be able to afford top equipment and a full staff. And that’s not easy to do if you’re financially underwater.
Any financial adviser would recommend that you keep your books in order. Having a reliable bookkeeper helps your medical practice:
Improve Your Revenue Cycle Management
Tracking your revenue per hour is crucial for any practice. When you know who and what is bringing in the revenue, you can maximise your practice’s profits. For example: you may realise that you make the most money during midday hours. This piece of knowledge will allow you to schedule staff accordingly to have ample appointments available during your most profitable hours.
A bookkeeper can also figure out which practitioners are bringing in the most revenue in your practice. Access to granular information like revenue per hour by practitioner allows you to identify the source of money troubles. How can you improve the revenue for doctors with lower-than-average billables? Compare what they’re doing to the highest billing doctors to see if there are obvious differences.
Better revenue management requires better revenue analysis. A bookkeeper can break down your revenue in creative ways and allow you to make more informed decisions for your practice.
Outsource Your Payroll Process
On top of tracking your accounts receivable from patients, handling overhead bills like utilities, and ordering supplies, you also need to keep your people paid. A bookkeeper can also take over your payroll process. For every 25 employees your practice has, you will spend about 100 hours per year manually managing payroll. That’s a lot of time not spent interacting with patients.
Could your front desk staff have more time for patient follow up if they weren’t also processing payroll? Consider outsourcing your entire payroll operation to a trusted bookkeeper to free up your staff to better serve your patients.
Streamline Your Accounts Receivable and Accounts Payable
Essential bookkeeping for medical practices also includes tackling everyday cash flow. You need a bookkeeping expert to track every bill you pay (accounts payable) and every incoming payment (accounts receivable). This type of tracking lets you create accurate balance sheets and have every receipt necessary on hand to lodge your taxes properly.
A bookkeeper will know how to code, record, and analyse your accounts receivable and accounts payable. They can even create regular reporting with notes. You’ll learn if you’re overpaying for medical supplies, which patients still haven’t paid, and other important information.
Identify New Opportunities Using Financial Reports
A good bookkeeper can balance your books. A great bookkeeper will also offer meaningful suggestions. Medical practices should be looking for ways to grow and evolve. Industry-specific bookkeepers will be able to suggest opportunities for growth, such as adding new services or renting out patient rooms to holistic health practitioners. You want to scale up at a responsible pace, not a break-neck speed that will lead to failure.
How bookkeeping services can improve your medical billing process
Unpaid medical bills can quickly spell trouble for your medical practice. A bookkeeper can streamline your billing processes to create a better accounts receivable record. Your bookkeeping service may institute improved policies like:
- Automatic follow-up for unpaid bills. Are you contacting patients on a routine basis if they have a balance with your practice? A good medical billing process will send out automatic reminders to patients who need to pay their bill.
- Better payment processes. Increasing the number of payment methods can increase the chances that you will be paid promptly. Your bookkeeper will be able to set up new credit card and online payment systems that are easy for patients and great for cash flow.
- Coordinate with medical billers. If you’re one of the many Australian medical practices who work with an approved medical biller, a bookkeeper can work with your biller as needed. Using an outside medical biller can free up a part-time bookkeeper to focus on your other internal financial needs.
Bookkeepers can improve your medical business’ financial health
Keeping track of bookkeeping in the medical office is not a job for someone without financial expertise. Even a medical practice with a small staff should consider outside help to manage billables and brainstorm new revenue streams. Bookkeepers can improve overall financial health in several ways.
- Getting paid on time improves your cash flow. A bookkeeper who makes sure you get paid is going to immediately improve your financial picture.
- Looking for unnecessary spending can eliminate waste. An experienced bookkeeper may be able to spot redundancies in your spending or identify high-cost expenditures with a more affordable alternative. For instance, you may be able to bundle telecommunication services to bring down your overhead costs.
- Breaking down revenue can reveal successes. Smart bookkeeping isn’t just about eliminating bad spending. It’s also important to spot areas where you are succeeding. If you have a particular service or set of operating hours that bring in the most success, you’ll want to make sure you’re prepared to grow those parts of your practice.
- Changing bookkeeping methods helps you grow. Small operations may begin with a cash method. This means you’ll count cash as it enters your bank account. Larger practices may want to switch to accrual accounting, which is when you count revenue once the service is complete. Switching to an accrual method allows you to better forecast the short and medium-term financial future of your practice.
- If you need help with medical billing and healthcare bookkeeping, consider calling in industry experts. Visory can connect you with a team of healthcare bookkeepers who know how to manage patient billing, payroll, and more with confidentiality in mind.