5 Steps to Keep Your Practice Financially Healthy
Business Financial Planning: Ready for the New Year?
It’s probably no surprise that getting healthy and getting organized nabbed the No. 1 and 2 respective spots for 2017 New Year’s resolutions, per an NBC story*, but they also make for great business goals.
With 2018 fast approaching, is your practice on track for a new year of financial good health? Help get your business’s financial house in order — and get a jump on the new year — with these quick tips from Audigy senior finance manager Dani Johnson.
Be Realistic With Your Financial Goals
From anticipating cash-flow needs and the cash flow to cover those needs to considering distributions, accounts receivable, loan payments, and other factors, it’s important to be realistic in the budgeting process, so you can set revenue targets that go beyond your break-even point.
That also goes for upcoming life changes, which affect the practice. If, for example, retirement is in the near future, make sure you’re on the right path to achieve your goals.
“Most people underestimate their cash needs in retirement,” says Johnson. “Work with a financial planner that knows your professional and personal situation, and save, invest, and diversify early!”
One Audigy member’s detailed annual planning involves reviewing each of his locations’ individual key performance indicators and how they contribute to the financial success of the entire practice. Transparency, tracking, and focus collectively contribute to his success, which shows in the business’s multiple years of considerable growth.
Dive Deep Into Your Current Financial Health
Knowing your starting point and where you want to go is a big chunk of the battle, and asking key questions can help you win:
- What is your current working capital?
- Have you been improving your financial health in the past 12, 24, and 36 months — or have you been regressing?
- Whether team dynamics, individual skill sets, training and education, cash management, marketing, leadership, market factors, or all of the above, what have been the driving factors in your financial challenges or success?
- Given the driving factors of the past performance, what’s a realistic growth target?
- What vacations and other absences — broken down by location and provider — need to be accounted for in the budget?
- What, if any, industry trends should be considered in planning for 2018?
- What is the landscape of your individual market?
- What is your current market share?
- Does your market support your target growth?
- What are the trends in reimbursement rates compared to your current revenue streams and contracts?
- Do your contracts support your professional and financial goals?
Key questions and answers not only help you uncover gaps but also help you identify the additional support needed to achieve growth, whether it’s mastering billing and coding issues; refining marketing strategies; or committing to professional development opportunities such as Audigy’s Team Summit, Provider Boot Camp, Leadership Boot Camp, and Patients for Life® training.
Keep Your Team In Mind When Financial Planning
Your staff plays a crucial role in financial planning for 2018, ultimately driving or hindering your success. Keeping in mind that personnel costs typically comprise the highest expense, always consider each team member’s skill set; personal, professional, and financial goals; will; dynamic; and potential in creating your financial plan.
Help your team help you by keeping everyone informed. The team needs to know and understand your expectations and how individual and joint contributions help everyone achieve their goals.
When should you plan for the new year? Every day, because planning isn’t a single event with a start or stop time.
“We continually adjust based on movement throughout each year toward or away from goals,” says Johnson. “The budget is set each fall, but we forecast throughout the year in anticipation of budgeting season — always keeping in mind how our planning, decisions, and actions impact our longer-term goals.”
Need Further Tips? Learn How Audigy Helps Practices With Their Financial Success
Maintaining the financial health of a business is a nonstop task, which is why Audigy’s Finance Team works practically night and day to tackle the tough stuff — budgeting, projections, monthly financial statement reviews, and more — while helping practice owners confidently make the daily, monthly, and yearly decisions needed to thrive.
Audigy members not only benefit from our finance managers’ expertise combined with the expertise of all functions of our Strategic Business Units but also from the ability to benchmark against the entirety of Audigy and our members’ practices.
We’re making it easier for practice owners to focus on 2017’s third most popular New Year’s resolution: Live life to the fullest.* Plan your practice’s best year yet. Learn more about Audigy’s finance services.
*NBC News. 2017 New Year’s Resolutions: The Most Popular and How to Stick to Them. https://www.nbcnews.com/business/consumer/2017-new-year-s-resolutions-most-popular-how-stick-them-n701891. Accessed Nov. 8, 2017.