By Margery Weinstein
Review of Optometric Business
March 2, 2022
Financial management is a huge chore for most ODs–one most did not go to school for. With this task requiring so much time and energy, many ODs throw up their hands and give up doing a conscientious job of bookkeeping. Fortunately, there is a new resource, Books & Benchmarks from IDOC, that is changing the way ODs manage their finances.
Here are the details on this new resource, including how it is changing the work life and practice success of one OD.
Do You Understand Cash Flow & Where the Money You Earn Goes?
The post-pandemic recovery period has been good for most ODs, says IDOC Financial Consultant Nathan Hayes. However, the additional money coming into the practice during this time often is not properly tracked and set aside for overhead expenses. “Many – if not most – practices have enjoyed their best financial results ever as we’ve come out of the shutdowns, even if some of that is the result of being short-staffed. But even with a clear understanding of profit and loss (P&L) benchmarks, many practice owners still struggle to understand cash flow and where all the money goes,” he says.
IDOC Books & Benchmarks is a fee-based service available to all independent optometric practices.
The service retails for $550 per month, with an IDOC-member discounted price of $450 per month for a single location, and a $500 setup fee to migrate the practice’s current financials to the IDOC Books & Benchmarks platform and chart of accounts. There are additional fees for multi-location practices. Non-members would pay retail price.
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Books & Benchmarks provides help exactly where ODs most need it, says Hayes. “IDOC Books and Benchmarks is a new service we’ve launched in which IDOC takes over managing QuickBooks and the back-end of a practice’s payroll software, then uses the data from those two sources and our IDOC Insider database to report back benchmarks that help owners see both their progress over time AND how they compare to other practices in terms of managing expenses and the productivity of their doctors, staff and space.”
Key areas Books & Benchmarks takes care of for ODs include:
1. Accurately categorizing expenses
2. Reconciling financial statements every month
3. Splitting out payroll between departments – especially breaking out owner wages and associate OD wages from other staff
4. Laying out financial statements in a way that’s both meaningful and concise
5. Presenting data in a way that helps owners better understand their practice as a business AND make better decisions about investing into growth
Lacking the Expertise & Time to Effectively Manage Finances
“Time is the biggest challenge,” says Barbara Dune, OD, of Serenity I Care in Hartford, Conn. “And it’s not my expertise. I love looking at data and then making decisions based on that data, but I hate having to input numbers.” Dr. Dune uses QuickBooks, which she was able to give IDOC Financial Services Manager Hayley Stewart access to. Hayley then inputs the data on Dr. Dune’s behalf. She no longer has to spend hours poring over and uploading numbers.
The time and expertise Books & Benchmarks offers in the review and inputting of her data is important, explains, Dr. Dune, because a system like QuickBooks doesn’t give you good information if the numbers you upload are not both accurate and properly categorized. “You have to put the numbers in the right columns, so when running reports, it gives you the right information,” she says.
Numbers Tabulated & Ready to Be Used to Make Better Business Decisions
Books & Benchmarks presents her with all the financial analyses and metrics she needs to make good decisions for her practice. “Hayley is able to tabulate everything for me, and at the end of the month, runs P&L statements and other reports. I know all numbers have been inputted, and inputted correctly, which is a big weight off my back,” she says.
Accurate financial management data is especially important to Dr. Dune, as she is the owner of a relatively new practice, having opened her doors in October 2020. She has a constant need for up-to-date information about how much her profitability is growing, and where the weak spots are in her practice’s financial performance, so she knows where to devote additional focus and resources.
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Dr. Dune says she was spending 2-3 hours per week inputting data, and still wasn’t able to get the information she needed. “I was coming to the one year mark, and wanted to see how the practice was doing, and if I needed to change the way I was pricing my fees and other services. If I didn’t have that information, I wouldn’t know what I needed to change,” Dr. Dune points out, noting that in addition to the benefit to her business, she is able to spend the 2-3 hours she would have spent on bookkeeping spending time with her children instead.
As a result of the financial reports Books & Benchmarks delivers, Dr. Dune decided to increase fees on her practice’s out-of-pocket medical eyecare services. “I’m doing more medical eyecare now, and have more cash-paying patients, so I want to make sure those services are priced in a way that allows me to be profitably reimbursed for my chair time,” Dr. Dune said. The practice is evolving with a greater focus on dry eye treatments, low vision exams, diabetic eye exams and glaucoma care. She also is doing more contact lens exams, which are often out-of-pocket for patients.
Dr. Dune feels confident now about making decisions about pricing, and other key practice areas, with the information she gets from Books & Benchmarks. “I really feel Books & Benchmarks is the best decision I have made for myself and for my practice,” she says. “I have more confidence now when handing my books over to our CPA. If financial management is not something you are specialized in, or adept at, you need someone who can ensure you are effectively tracking your practice’s key metrics. It’s the information you need to profitably grow.”
Margery Weinstein is editor-in-chief of Review of Optometric Business. You can contact her at: email@example.com