In financial management, cash is king. It does not matter whether your business is struggling or growing, managing your cash flow effectively is essential for your business to survive. If you run a clinic, you may need to maintain a level of working capital that can allow you to move past business crunch times and continue to operate a business.
In managing cash flow, every transaction matters. If you always find yourself managing the cash coming in and going out all day long, you will agree that this process can be tiresome. Luckily, there are tools and tips that you can use to get things right and take a lot of stress out of your way.
Keep on Top of Billing
A proactive approach to your billing process plays a big role in the overall customer experience and maximizing your cash flow. Patients are likely to return to your clinic when they are confident that there will be no hidden expenses to worry about.
The billing department is key to the continuous profitability of your practice. Your team has to create bills on time, submit them accurately to government entities and insurance, and follow up to ensure that you receive prompt payments.
If you adopt solid billing practices, you will experience improved revenue cycle management as well as better cash flow. Billing errors, however, can easily add up lost time, wasteful spending, and delayed payments from insurance companies. If errors persist, it may lead to patients leaving your practice never to come back.
Focus on Revenue Cycle Management
Your practice needs revenue cycle management to ensure that incoming cash is sufficient to pay for all outgoing expenditures. But what is revenue cycle management? Revenue cycle management ( RCM) is the process of handling billing, payment processes, and revenue collection. It is a repeating process that starts with billing a customer and ends with writing off the bill.
If you implement an effective RCM system, your practice will experience improved revenue due to faster collections. The system will also streamline the billing processes, minimize errors, and enhance the patient experience.
Pay Attention to Utilities
Utilities are necessities for your business and your comfort. Your business’s ability to meet your utility service requirements can facilitate business success. You cannot take utilities for granted as a simple constraint can bring your business to a standstill.
Your clinic cannot function without a reliable supply of utilities. Utilities can be costly, and this can have an impact on the overall cash flow. If utilities are taking your finances downhill, you can consider moving to a new location. Equally, if your business is growing consistently and you wish to acquire new features and get more space, moving can also be a better option.
Setting policies and procedures can help you hold your employees accountable and provide a framework for making decisions. Policies can help you standardize your clinical practice, improve services, and provide a road map to everyday operations.
In the absence of policies, your staff and board members are likely to work under assumptions that may not be accurate or productive. Clearly set financial policies, on the other hand, can foster stable financial management by ensuring that funds and other resources are used and accounted for accurately.
While setting policies, make sure that everyone in your practice understands how critical the policies need to be enforced. Make it simple for your staff and patients alike to access them so that patients are not caught off guard.
Financial literacy can put you in full control of your business. Staying educated on matters of financial management can give you an understanding of what balance sheets are, and what profits and loss statements mean. Financial literacy also provides you with a clear view of your clinic’s financial state and subsequently guides you into making smart decisions.
It is a continuous process and is something you can keep improving as you run your business. Luckily, there are free resources that you can always refer to whenever you feel like gaining more knowledge on money management. You can also opt to take an online course to better understand money management.
Stay in Business and Help More Patients
Cash flow is one of the crucial indicators of the overall health of your medical practice. You will only succeed in effectively running your business if your account receivables are in check.
As a healthcare practitioner, providing outstanding patient care is your utmost priority. However, underlying this goal is the business side of your personality. Therefore, you have to stay on top of your cash flow management for your practice to remain profitable.