It’s important that doctors and medical practitioners who run their own practice make time in their busy schedules to check their practices are business healthy.
In today’s world, demands on health professionals including GPs and specialists have been heightened during the pandemic and this could lead to doctors being distracted from ensuring their business settings were still the most appropriate.
Doctors are invariably focused on patient care and that is a great characteristic, but they also need to be careful that it isn’t impacting the sustainability of their business. The key business and accounting principles that should guide health professionals setting up their practice also apply once it was up and running.
There are some basic tests doctors use, such as blood pressure and temperature, and there are also core checks to help confirm the wellbeing of their business. These include:
- What’s the best business model – company, partnership – is the current structure still suitable?
- Protecting cash flow i.e., having the systems in place to efficiently bill patients
- Equipment audits – is initial or repeat investment need and cash up front required?
- Does the practice have the appropriate support staff to keep the business going if the doctor is away?
- Ensuring they have the right level of professional indemnity insurance to cover new procedures or a changed specialization.
Another key area to consider was temporary expensing, asset write-off and depreciation – valid accounting tools are common at tax time but there were some potential pitfalls for doctors having their books done just on a tax basis rather than an accounting basis.
These tax treatments effectively reduce reportable profit, and this can make it harder to loan money from banks and also reduces the valuation of a business if a doctor wants to sell their practice or share in it.