Traditionally GP and dental practices have only really looked at their financial performance as and when the year-end accounts have been delivered, prioritising (and rightly so) the care of their patients.
However, practices have faced increased pressure in recent years, and as such, the need to keep on top of financial performance has grown.
Looking at financial data months after the year-end to fulfil compliance requirements does not help businesses grow or become efficient, and as Making Tax Digital continues to be implemented it will become mandatory to report financial performance more regularly.
There is a misconception that only large businesses require a financial strategy but there are basic considerations that all practices should draw more thought to, which will help increase profits, allocate resources and avoid unnecessary expenses.
Ultimately, this should create efficiencies, allowing more time on patient care and less time worrying about finances.
Here are some basic things to consider:
- Make sure you have the right financial software. Are you happy with your software? What flexibility does it offer? What would you like out of your software that you aren’t currently getting? Can changes be made to create efficiencies and how much of your software is automated?
- Set up a finance committee. Do you have a finance team responsible for performance? Ask yourself are the right people in this team and what involvement does your accountant have with them. You should hold regular finance meetings and regularly review the financial performance of the business, setting budgets and goals and comparing the actuals.
- Review income and expenditure. Do you understand how contract changes are likely to impact your practice? Have you looked at your expected income over a period of time and considered what impact these changes could have on your performance? Have you reviewed your costs considering changing income? Can any savings be made? Is the skill mix of your staff efficient? Are you a training practice?
- Review the statistics. Do you look at statistical data and compare your performance to that of other practices? This may tell you if you are spending too much or too little on resources. What suggestions does the benchmarking provide in terms of performance? Is your income sustainable?
We Know / the importance of helping you to understand where you are now, where you want to be and helping you get there.
Whether this is by becoming an integral part of your business, providing ad hoc advisory or coaching or simply being on the other end of the phone or a coffee away, we are always happy to help you improve your business.