As a physician or other medical worker, your primary focus is likely to be on patient care -- not the tedious details afterward. However, bookkeeping in the medical office isn’t something you want to overlook.
If you’re running your own medical practice, your goal is to keep your practice as profitable and effective as possible. This means you’ll need accurate financial records to guide you along the way.
But how exactly should you tackle the task of bookkeeping? Below are three tips to give you some guidance.
3 Tips for Bookkeeping in the Medical Office
When it comes to your bookkeeping, you want to ensure that everything is accurate and up-to-date. And if you’re starting your own medical practice, this can become a bit stressful.
Luckily, we have put together three simple tips to help you manage your books:
- Choose your accounting method
- Schedule profit/loss statements
- Hire professional help
Choose Your Accounting Method
Accounting duties will take up the bulk of your bookkeeping. For medical practices, there are two types of accounting to choose from:
- Accrual accounting
- Cash basis accounting
Accrual accounting is a common form of bookkeeping in the medical industry. Through this method, you’ll account for all of your expenses the moment you receive a bill for them. On the same note, you’ll account for any receivables from your patients the moment you bill them rather than when they make a payment.
Although this method of accounting is a common bookkeeping practice for private practices, it’s not always the preferred method. Instead, many others prefer to use cash basis accounting.
Cash Basis Accounting
The cash basis accounting method is similar to the accrual accounting method, only receivables and billables are logged upon payment, not receival. The majority of physician-owned medical practices prefer this method, as it provides the most up-to-date view on your business.
For this method, it’s vital to prepare for large quarterly expenses, such as malpractice insurance. Hidden costs can sneak up on you with cash basis accounting if you’re not careful in planning ahead.
Schedule Profit/Loss Statements
Medical practice management books are great for keeping an eye on the pulse of your business’ financial health. And that’s why getting into the habit of creating a schedule for profit and loss statements is beneficial.
Doing this regularly will give you an overhead view of what’s resulting in gain and what results in loss. This will help you recognize and eliminate discrepancies, as well as decide where to invest more money.
Although these statements are not necessary in order to run a medical practice, they provide a ton of insight and can be extremely beneficial for improving your operations and efficiency.
Hire Professional Help
Having the best medical practice management books possible is essential for managing your day-to-day transactions. However, this information can become much more valuable when you’re able to gain insights and additional information from it.
And because your schedule is likely to be full, it never hurts to seek professional help from a healthcare management company with proven success in the industry.
By choosing to partner with a management company, you’ll have more time to focus on patient care rather than the confusing and sometimes-overwhelming business side of operations.
If you’re about to start your own medical private practice, or have been running one for a while, then take a close look at your bookkeeping strategy and see where you can improve. There’s always room for improvement, and removing inefficiencies can save you a ton of time and headache.
Not sure where to start, or worried that you may need assistance running your practice? Feel free to schedule a free practice analysis: