As the year comes to a close, health practice owners and partners have a lot on their plates. Between providing quality care to clients and managing the day-to-day operations, it's easy to overlook the importance of year-end financial tasks. However, taking the time to review and organize your finances can set you up for a successful and stress-free year ahead. Here is a year-end financial checklist designed specifically for health practices:
Review Your Revenue and Expenses: Examine how much money you brought in, and what you spent money on this past year. What was left over? Did you find any expenses that are no longer necessary? Are there any patterns that will help plan for next year (like slow months or how long it takes to collect on submitted claims)? Understanding your financial picture will help you make informed decisions for the future.
Update Your Budget: Based on your review, create a budget for how much you will spend for different categories of expenses. Be sure to consider any changes in your revenue. And don’t forget about one-time expenses like new furniture or computers or other equipment you need to grow your practice. A well-thought-out budget can serve as a roadmap to financial success.
Assess Insurance Contracts: You can negotiate with the insurances your practice accepts once a year. Review their contracts and ask for a higher reimbursement.
Reconcile Accounts: Does your accounting software and financial reports match your bank and credit card statements? Ideally, this is done throughout the year so you can compare your actual financial reports with your budget and goals. But if you haven’t been doing that, now’s the time to make a plan to get it done.
Tax Planning: Work with your tax professional to assess your tax liability for the year. Consider strategies for minimizing your tax burden, and if your tax professional does not do planning, it might be time to find one who does.
Employee Compensation: Consider giving raises or increasing benefits for the upcoming year. Bonuses should come from your profit… do you have what you hoped for?
Compliance Check: Stay up-to-date with regulatory changes and compliance requirements in the mental health field. Ensure that your practice is adhering to all relevant laws and regulations.
Assess Technology Needs: Review your practice's technology infrastructure, including software and hardware. Stay up to date on HIPAA and cybersecurity measures. You may need to budget additional technology this coming year to have peace of mind that your practice is secure.
Emergency Fund: Having a financial cushion can help you weather unexpected challenges or downturns in your business.
Professional Development: Consider budgeting for training, certifications, or conferences that can enhance skills and knowledge for both you and your staff.
Plan for Growth: If your practice is thriving, consider strategic expansion plans. Whether it's opening a new location, hiring additional staff, or offering new services, make sure your financial plan supports your growth goals.
Seek Professional Guidance: Finally, don't hesitate to seek advice from financial professionals, such as accountants or financial advisors, who specialize in the healthcare industry. They can provide valuable insights and guidance to help you navigate the complexities of your practice's finances.
In conclusion, taking the time to complete this year-end financial checklist can help health practices start the new year with confidence and clarity. By staying organized, reviewing your financial performance, and planning for the future, you can ensure the continued success and growth of your practice while providing excellent care to your clients. Here's to a prosperous year ahead!