Simplify the bookkeeping for your health practice
Simplify the bookkeeping for your allied health practice
Do you want to simplify the bookkeeping for your health practice?
Lets face it, it’s boring, stressful, and most likely the least fun thing about being your own boss.
But, what if we took the pain out of bookkeeping, made it super easy AND even a little bit fun?
Well we can! It’s a new era for bookkeeping and in this post I am going to share with you our tips on how you simplify your bookkeeping.
Whether you want to do it yourself or have an expert keep an eye on it for you the following tips will simplify the bookkeeping for your allied health practice.
Our tips to simplify your practice bookkeeping
Software + apps
- Choose the right accounting software – without a doubt, we recommend Xero. Setup bank rules for all regular transactions and transfers between accounts.
- Choose receipt processing software to manage your bills and receipts. We recommend Receipt Bank
- Go paperless and save all your business documents, bills and bank statements in cloud document storage. We recommend Google Drive.
Banking
- Separate your personal expenditure from your business. Don’t pay for anything personal from your business bank account or credit card and vice versa, don’t pay any business expenses from your personal account.
- Be consistent with the reference you use on your bank transfers and include the business name/ payee in the main description – please don’t use the invoice number as it makes it really hard to match up in Xero.
- Don’t use cash – for anything. Use a debit card for minor expenses. This reduces the time it takes to record, but it also eliminates expenses that get lost and never claimed.
- Avoid Paypal and Amazon purchases where possible. It’s really hard to track these expenses as they don’t provide good tax invoices easily and the references that appear on your statement are very limited.
Processes
- Setup your utilities and regular expenses to be direct debited
- Ask your suppliers to email all of your bills to a central email address that can be accessed by your team or bookkeeper.
- Outsource your payroll. This takes it off your plate and frees you up to focus on other things. Handing over payroll to an expert can relieve so much pressure and stress.
- Review and streamline your office and front desk processes. Map out the processes involved in handling your bills, receipts, payments, banking and time sheets. Work towards simplifying this and transition to being a digital based, paperless practice.
So in conclusion, implementing these ideas will lead to a simpler and easier to manage bookkeeping process.
If you would like to find out more, go deeper and discover the apps we use to automate bookkeeping, download our quick guide to SIMPLIFYING YOUR PRACTICE BOOKKEEPING.
If you would like help to simplify your bookkeeping or to outsource it to professionals specialising in the allied health + dental industry, CONTACT US.
Calculate your REAL profit in 5 easy steps (is your practice making enough money?)
Calculate your REAL profit in 5 easy steps (is your practice making enough money?)
What is REAL Profit?
Is your practice making enough money? Did you know that the net profit on your P&L isn’t necessarily your REAL profit? Sure, it keeps your accountant happy and provides the right information to calculate your tax – but that’s boring right? PLUS it doesn’t give you the number that really makes a difference for you as the owner.
REAL profit is the life blood of your practice. A healthy REAL profit margin is so important for the future of your practice and your own well being.
So, how do you figure out what your REAL profit is?
Let’s calculate it –
Step 1 – Make sure your bookkeeping is up to date and accurate. Record your income and expenses correctly. Make sure lease payments and loans are coded correctly. Enter any expenses you have paid for out of personal accounts.
Step 2 – Run your P&L report for a month – identify your net profit figure
Step 3 – Add up any costs that don’t appear on the P&L – things like, regular loan repayments, finance repayments, your drawings
Step 4 – Deduct these ‘other costs’ from your net profit figure
Step 5 – You now have your REAL profit figure. Is it still positive? Great. If it’s negative, this is why cash could be tight for you. Regardless of the net profit on your P&L report, your REAL profit is what matters most.
Example
| Practice A | Practice B | ||
| Income | 175,000 | 175,000 | |
| Expenses | 140,000 | 140,000 | |
| Net Profit (P&L) | 35,000 | 35,000 | ←- Same Net Profit |
| Loan payments | 5,000 | 10,000 | |
| Owners drawings | 10,000 | 20,000 | |
| Equipment finance payment | 1,900 | 5,500 | |
| REAL Profit | 18,100 | (500) | ←– very different REAL profit and Practice B has regular cash flow problems |
If you have a healthy REAL profit you will cruise along each month. If it’s low or negative I know you will be feeling stressed and having trouble keeping up with bills and the ATO.
So if you’re wondering why things feel tight all the time, calculate your REAL profit. If you need help or would like tips and ideas on how to improve your REAL profit CONTACT US today.
Is your practice model holding you back?
Is your practice model holding you back?
What does your private practice business model look like? Did you know that a business model is the reason why some practices thrive and some don’t.
Every business (even those in the same industry) has it’s own unique model.
It’s this unique model that can make or break a business.
I call this your model + mix – it’s the unique combination of how you do, what you do, that determines the success of your practice.
The key is tweaking and aligning each part of your model so that you
- Stand out from your competitors
- Have a purpose
- Provide a unique + remarkable service
- Serve customers that are right for you
- Charge enough to be profitable
- You are visible and the right customers know how to find you
Developing a unique private practice business model can be challenging and scary – many practice owners fall into the trap of offering everything to everyone and being a generalist. What this can do though is make you beige – your practice gets lost amongst everyone else because you’re not doing anything unique.
If your business model is a little bit beige – it’s likely holding you back.
I am hugely passionate about creating ‘outside the box’ business models. I help you drill into what makes you different, challenge you on what you ‘think’ you should offer and help you create a business model that makes you stand out and attract the right patients. This is when practice ownership becomes fulfilling, meaningful and fun.
“Why fit in when you were born to STAND OUT!” – Dr Seuss
Making sense of your numbers – forget your Profit and Loss report
Making sense of your numbers in allied health private practice
Do you like to crunch your numbers? Do you love reading your financial reports?
In the 18 years that I’ve worked with small businesses – I am yet to meet a business owner that actually enjoys crunching their numbers. As an accountant I struggle to understand why – but as a business owner I totally get it.
The numbers, finance and reports are the last thing we want to think about when we are running our own business. There are so many other things to worry about – your patients, your team, marketing, sales, networking – getting some sleep… so many other priorities.
And to be honest, reading a Profit and Loss report is pretty boring. But – as an accountant I know how crucial staying on top your numbers is.
The numbers tell you EVERYTHING
Making sense of your numbers will give you control over the success or failure of your private practice. You will understand what is happening at the moment and you will be able to PREDICT how things will go for you in the future.
If you don’t delve into the numbers you are missing vital information that can help you improve your bottom line and ensure you have business actually worth running.
The problem for most business owners is that they don’t have access to or understand the numbers that actually matter.
Running your profit and loss report is usually meaningless because a) its historical b) it needs to be bench marked and c) it completely excludes metrics related to your patients and customers.
Metrics are the key – metrics tell us at any point in time – what’s working, what’s not, are we on track to make enough money AND are our patients actually happy?
So forget the profit and loss report – and focus on what actually matters. We can help you determine the best ones for your practice, but in general we recommend tracking the following –
These will tell you if you make enough money, where you should make changes and explain where it all goes.
- Fees generated
- Associate wage costs
- Overhead costs
- Gross and Net Profit
- Cashflow
These will show how well your practice is run, how efficient the team is and how happy your patients are.
- Referral sources and how patients come to you
- Number of appointments you have each week
- Client retention– how ‘sticky’ are your patients
- Utilisation rate– are you using your rooms and space effectively
- Conversion rate + method– how successful are the admin team at booking in patients
With the right practice processes and software in place, it is possible to track these as often as you like – you could even look at them daily.
With a budget and benchmarks also in place, you will understand exactly what they mean and be in full control of your practice.
Creating a healthy practice that makes you happy.
As a practice owner, you have one of the hardest jobs in the world – balancing clinical work whilst running your practice day to day and, ensuring you stay in business.
It’s a lot to do. It’s stressful and keeping up with it all also means other parts of your life come last. Often it means sacrificing precious time with family and putting your own needs last. Your wellbeing as a private practice owner is vital to for you and your patients.
It is entirely possible to overcome these problems and move from a place of stress and chaos to organised bliss – it all comes down to structure, systems, good planning and an understanding of your numbers so you can create a healthy practice.
What does a healthy practice look like, and what difference would it make to your life?
- There is a clear long-term direction, vision and purpose
- It provides exceptional care and service to patients
- It has documented processes, and everything is performed consistently and routinely
- Systems are as automated as possible limiting reliance on staff
- The practice can run without you around
- Your team is professional, highly competent and connected
- You have a clear financial plan in place and you know your numbers
- There are no cashflow problems
- You are happy, in control and able to choose when and how much you work
- There is purpose to your work and you make a difference to your community
How do you improve your wellbeing as a private practice owner?
- Start with your goals – how much money do you need to make and how many hours do you ideally want to work.
- Develop your practice plan, and identify your ‘why you’ – what makes you different to your competitors and why would a patient choose your practice over another
- Streamline and automate your practice processes. Create structure and ensure everything is carried out consistently and methodically with great processes.
- Understand your financial and non financial numbers – how is your practice going financially and identify what you could do to improve that. It’s not always about more patients or growing bigger – often improvements can come from about being smarter with what you already have.
If you would like more tips on how to transform your practice, go to businessmind.io or CONTACT US today