In medical practice, like any other business, cash flow is king. It’s the key to your ongoing stability and practice success. However, for medical practitioners who have mixed billing across public and private services, it can quickly become a minefield. Public billing may allow you to see more patients and give back to the community, but it can also come with payment delays of up to 12–18 months and significant administrative requirements.
Failure to address cash flow concerns can impact your business in several ways. First is the obvious one: the business may not remain viable when cash flow issues impact vital expenditures such as staff wages, rent, or necessary equipment and supplies. But there’s another side to it too.
Poor cash flow can impact your borrowing capacity, affecting your ability to buy property or purchase your own practice because it is one of the first things a lender will review.
The good news is that there are ways to smooth cash flow bumps and ensure you can continue to deliver for your patients and build your practice.
#1 Consider outsourced invoicing
Online invoicing tools can be a great way to speed up cash flow and smooth it out. These tools allow you to quickly invoice your billers, including the government, and easily collect payments and generate reports.
Tools like Surgeonline also talk directly to Medicare’s ECLIPSE system, so all the required patient data is uploaded, and there’s no back-and-forth to fill in gaps. And if you are charging a patient gap, you can easily assign this amount to the patient and invoice in one place.
Some tools offer packaged services to manage overdue payments, too, which can take the administrative headache out of issuing and chasing payments.
#2 Build in-house expertise to decrease delays
In the early days of a practice, it’s not uncommon for practitioners to run without a practice manager, thinking it will be cheaper to run billing themselves. But it’s well worth considering, as the role can often pay for itself in the form of speed and efficiency of payments.
A rockstar practice manager really can be a game-changer. Managing Medicare payments is a specialist skill, so look for an experienced practice manager, surgical assistant or administrator with this background to help you get set up for fast, efficient processing with the right coding and systems to reduce delays. Managing payroll tax and having the right bank accounts set up from the outset can provide significant efficiencies as the practice grows.
And once you have this expertise within your team, ensure the process is documented and shared with other administrators as your team grows. That way, even if your practice manager moves on, you can continue reaping the benefits.
#3 Revisit your financial goals and plans
With the move into your own practice, your income structure changes, so don’t overlook the importance of updating your financial plans. If you haven’t revisited your goals and the structure of your finances since you made the move, this should be a top priority.
Setting the right goals will ensure you can live for today while planning for tomorrow, building future income streams and ultimately working towards financial freedom and the retirement you deserve.
Apt’s expert financial advisers understand the landscape for medical practitioners and can help you set yourself up for success in business and personal finance. Contact us today for a free, confidential chat to find out how we can support you in achieving your goals today and tomorrow.
General Advice warning
The information provided in this blog does not constitute financial product advice. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. Apt Wealth Partners (AFSL and ACL 436121 ABN 49 159 583 847) and Apt Wealth Home Loans (powered by Smartline ACL 385325) recommends that you obtain professional advice before making any decision in relation to your particular requirements or circumstances.
