How to Manage Revenue for an Orthopedic Clinic
Managing the finances of your orthopedic clinic will be no different from managing any other small business. You need to track your incoming cash flow, watch your outgoing expenses and plan for the future according to those factors. Where an orthopedic clinic is different is simply in the kinds of income and outgo. Though this article addresses some of the specifics of an orthopedic clinic's cash flow and expenses, anybody can use it as a framework to improve business systems.
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Instructions
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Track Incoming Revenue
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Track income directly from patients on a patient-by-patient basis. You should be able to know at any time who's up to date and who's falling behind.
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Track income from insurance payments. In many cases, this will be the bulk of your cash flow. Track this information both by insurance company and the patient to whom the payment is applied. Have a plan in place for insurance companies that fall behind on or deny claims. Those situations are often easy to let fall through the cracks.
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Track income from on-site sales. Not all clinics have this, but if you do directly supply rehabilitative tools, literature or other items, have a line item on your tracking software for these. If possible, connect it directly to your inventory-tracking system.
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Have a specific file or program dedicated to tracking and dealing with delinquent accounts and patients on a payment plan. These take the most work, so making as much information as possible available will make them easier to service.
Track Outoing Expenses
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Every week, somebody needs to compile an itemized list of your clinic's expenses. Some bank and credit-card websites will do this for you automatically, if you set them up properly. Every month (at the longest), analyze these reports.
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Compare your expenses for the month with the month before it, with the coming month from last year and with the same month in past years. If there are major changes in any point, make sure you understand why.
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Compare your expenses to averages for your industry in your community. It's not bad to be above or below average, but if you are, be certain you know why.
Analyze and Plan
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Based on your cash-flow numbers, set reasonable goals for growth. Where do you want to be in a year? Five years? Ten years? Knowing that also will tell you where you need to be next week and next month in order to achieve those long term goals.
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Plan carefully what you intend to do with excess cash flow. Some will go home with you as profit (although consult with your accountant on how best to strategize this). However, you should seriously consider reinvesting some of it back into your clinic. Have a specific plan for exactly how you plan to do this.
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Set benchmarks and red-flag points for revenue, expenses and profit. Benchmarks are short-term goals on the way to your strategic goals. Take time to celebrate and reward yourself and your staff when you meet them. Red-flag points are points of lost revenue or extra expenses where you want to pay special attention, usually when the profit-to-loss margin dips below a certain point. When you hit a red-flag point, execute a plan to fix the situation immediately.
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Tips & Warnings
Business finance is a complex topic. It's advisable to seek the advise of an expert, even if you have to pay for it.
