Your practice has myriad financial management needs that must be met before you can increase profitability. Here are top tips from ROB contributors on optimizing the financial management of your practice to both better serve patients and create a business primed for growth.
Budgeting
2020 Budget: How to Do It Based On 2019 Numbers
Your 2020 practice budget should be finalized and put into the first phases of action by now. Just in case you haven’t done this yet, here is how to create the budget for this year based on your practice’s 2019 financial performance. >>READ MORE>>
Top Budget Priorities When Opening a New Practice
Opening a new practice means budgeting for many things. The question is: Which of these things should be priorities? Here are five key investments when starting a new practice. >>READ MORE>>
Keys to Creating & Implementing a Budget for Your Optical
The optical shop is an essential part of most practices’ profitability, often accounting for as much as 60 percent of practice revenues. I’ve found that it’s important to plan, and carefully track, expenditures and profits, and to budget, specifically for this segment of the practice. Here are tips to ensure you are effectively budgeting for your optical. >>READ MORE>>
Keys to Creating a Budget & Patient Scheduling Matrix
The number of patients you see is a key factor in determining how profitable you are. When you learn how to create a practice budget, and then to create a patient scheduling matrix based on that budget, you are able to better serve patients, and to grow financially by enhancing your efficiency. >>READ MORE>>
Podcast: How to Create a Simple Practice Budget
Creating a practice budget and reviewing it every 1-3 months allows you to accurately set earning goals and manage expenses. Adhering to a budget enables you to make data-based decisions on investing in your practice to enhance patient care and increase profitability. Also, a practice that runs by a budget has a higher valuation to potential buyers. Michael Kling, OD, founder and CEO of Impact Leadership, shares his insights, and provides templates to help you get started. >>LISTEN>>
Taxes
New Tax Deduction: What to Do Differently Next Year
The new 199A tax deduction offers savings for practice owners. A financial planner shares what he learned about maximizing the benefits of this deduction. >>READ MORE>>
Last Minute Tax Reduction Strategies
Tax-paying season is upon us, but there are still measures you can take to lessen your tax burden from the previous year. >>READ MORE>>
Charitable Tax Deductions: How to Optimize the Benefit to Your Practice
Charitable giving is a good deed—and it also offers tax benefits to small businesses. Here’s how donations to charities impact the taxes you pay, and how to optimize potential savings. >>READ MORE>>
6 Steps to Take Advantage of Tax Saving Opportunities Throughout the Year
Some of the more important deadlines are those associated with making federal tax payments and filing the appropriate reports. We, as employers, must also provide employees and contractors with W-2 and 1099 reports. The rules can be overwhelming, and missing a payment, or making a late payment, can be costly to the practice, including penalties that come with fines. Here is how to stay on top of the many tax-related deadlines throughout the year. >>READ MORE>>
Staff Financial Management
How My Practice Trained Its Way to 11% Annual Growth
Consistent practice growth requires constant learning and improving. My practice has developed an ongoing training system in which support staff employees are always learning how to do more in serving patients and growing our profitability. Here is how you can do this, too. >>READ MORE>>
Why & How to Implement a Staff Performance Incentive Plan
Your support staff members often are motivated on their own to help patients, but offering monthly financial incentives, known as performance incentive management plans, can make them even more eager to do a great job. Here’s how these plans work, and how to implement them in your office. >>READ MORE>>
Are You Violating Compensation Law?
Your employees are the most essential part of your office, serving on the front lines with patients. They are often the first and last people in the office that patients have contact with. Could the way in which you are compensating them be placing your practice in legal peril? >>READ MORE>>
Unintended Consequences of Paying ODs Performance Bonuses
Bonus strategies are frequently used by employers to motivate staff and increase the prosperity of their businesses. However, these strategies may be viewed negatively by some employees, especially doctors. You may want to think twice before using them to replace the traditional monetary reward system of salary increases. >>READ MORE>>
Cost Cutting
How to Analyze Your P&L and Save Over $98,000 Annually
You can strategize ways to generate revenues, but if you’re not carefully watching for, and controlling, expenses, you won’t meet your profitability goals. Here are the ways I’ve seen practices use their profit-and-loss statements to successfully cut costs. If done correctly, these changes could equal as much as $98,000 annually in savings. >>READ MORE>>
3 Ways to Cut Costs in Your Practice
You need to spend a certain amount of money to serve patients as best as you can, but some expenses are just a profit drain. Here are three places where you can cut costs in your practice. >>READ MORE>>
Increase Your Net by $77,000 with 3 Cost Cuts
When I first took over my private practice from the previous owner, a practice valuator I hired for the initial purchase pointed out a red flag: Office expenses were higher than average. This launched my staff and I on a sleuthing journey that uncovered many unnecessary costs that the practice had accumulated throughout the years. Here are three cost cuts that made a huge difference to our profitability. >>READ MORE>>
6 Ways to Reduce Costs & Increase Net Profits
The goal of any sustainable business, including an optometric practice, is to make a net profit while providing excellent patient care. My practice continually seeks ways to increase our net, and there are two ways to do it: Increase revenue faster than costs, or reduce costs relative to revenue. >>READ MORE>>
Cash Flow
How to Manage Net Cash Flow
Net cash flow is the most critical metric in practice management and practice valuation. Here are keys to maintaining a positive cash flow that allows you to manage comfortably, expand services and sales, and readily borrow to make improvements. >>READ MORE>>
Three Scenarios of Net Cash Flow: Is Your Practice Financially Healthy? Is it Salable?
Net cash flow is the lifeblood of an optometric practice. It is the barometer by which the health of the practice is measured. It is also a primary component of a practice’s value. As cash flow increases, the practice value increases. Conversely, if cash flow decreases the practice value will fall accordingly. Decreasing or negative cash flow can mean a dying practice–unless immediate steps are taken. >>READ MORE>>
How to Do a Practice Valuation
Your practice is a business. Your business is either growing in value every year or it is decreasing in value. At some point you will want to sell either part, or all, of your practice. When you sell, you would like to receive maximum value for your practice. This article will help you get ready for that day. >>READ MORE>>
Why (and When) It’s OK to Stop Focusing on Practice Growth
We invest an incredible amount of time, energy and money to ensure as best we can that our top-line revenue and net income continues to track upwards. However, at what point is it enough? Can one ever get to the point of “making it” in their practice, and thus, be in maintenance mode rather than growth mode? How does one know when they’re at that point, and how do you gain the confidence to change your mindset? >>READ MORE>>
