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Table of Contents

• Needed Items to Track Your Cash Flow
• Needed Items to Track Your Productivity Daily
• Key to success!
• Important reminder!
• Resource links

 

 

 

 

 

 

 

 

 

 

Needed Items to Track Your Cash Flow

 

Everyone in private practice wants more cash.  A sound cash management system is the first step to success and more money. Your system must be simple and yet tell you what your profitability is on a daily basis.  When you know where you are financially, your better equipped to define where you WANT to be and attain it!

Many practice owners choose to use accounting software such as Quicken, Peachtree, or Quickbooks, however, none really teach you how to track your cash flow correctly. They are simply "organizers" of your data but do not process all the necessary information you need to get a quick and easy "snapshot" of your business from day to day.

I recommend you follow the simple program shown below to truly take control of your business' cash flow.

Track your daily three...

1. Daily expenses
2. Daily income
3. Daily productivity

INSTRUCTIONS:
Your actual daily expenses can be recorded by using the sample form or you can use an averaged figure. To determine an average figure start by adding your fixed¹ and variable² expenses in a given month and then divide it by the average number of days you are open for business per month (do not include your payroll costs and expenses). This will give you a daily expense average. You will want to update this figure periodically because as your business grows your expense averages will change. It's good to know this figure all the time.  It makes determining your daily productivity easier.

Your daily income items are things such as copays, product sales, administration fees (ie. assignment of benefit, translator, copy of medical records, etc.), reimbursement checks from third party billings.  Track these daily by using the sample form (do not use an averaged figure). You'll use this figure in your daily productivity calculation.

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Needed Items to Track Your Productivity Daily

Your daily productivity form provides you with a quick snapshot of your companies profitability and much much more! This is a simple form to complete but not easy to explain in text instructions. If you have any problems with the given instructions below you may call us and we'll walk you through it live. Download a Sample form

Instructions:

To calculate your total expense portion
1. First start by listing all your employees working for that day and calculate their gross wages in the the P1 column.
2. Total all the figures in the P1 column under "Payroll Total".
3. Calculate anywhere from 10-13% of the Payroll total and put under "Payroll Expense". This is your employer tax burdens.
4. Put in your Average Daily Expense or your actual daily expense.
5. Total it all to come up with your "Total Expense" for that day.

To calculate your total revenue portion
1. Total all the patient type columns (ie. HMO, FFS, PRI, etc.).
2. In the boxes marked "H", "F", etc. put the average reimbursement rate for the particular payment type.
3. Multiply the total number of patients from each payment type with the average reimbursement rate (dollar figure) and put the total in the box immediately below.
4. Total the entire row and put the figure in the "Reimb Total" box.
5. Put the Daily Income figure from your Daily Income Form in the "Daily Income" box.
6. Add both the figures to get your total revenue for that day (of course this is an anticipated figure because you haven't received reimbursement yet).

"Did I profit that day?"
If your Total Expense is lower than your Total Rev than you made a profit that day! If not, you are actually paying to treat patients.

To calculate treatment productivity
1. Now record the number of patients treated/seen by each employee under the appropriate NP (new patient) or Regular patient column under the appropriate employees row. Not all employees treat/see patients so not all will have figures here.
2. Subtotal in the far right column the total patients treated/seen by that one employee and divide by the number of hours worked to get the patients/hour ratio.

Other Special Items
The other items found in the lower left-hand corner are extremely important but we won't cover it here. Enroll in a workshop to learn more skills and secrets on how to truly succeed in private practice!

¹Fixed expenses are things such as rent, utilities, phone, lease payment, etc. Things you must pay every month.
²Variable expenses are "controllable". Such as office supplies, inventory cost of goods, disposables, petty cash, etc.

 

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Key to Success

Don't rely on computer accounting systems to give you this snapshot info. Use our forms. There is no other way.

 

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Important Reminder

 

Know where you are to know better where you want to be.

 

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Resource Links

• If you have any trouble with this section (most do) than consult with us at info@indefree.com 

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