3 Steps For Using a Budget to Meet Your Practice’s Financial Goals When we say the word “budget” to our clients for the first time, we get one of two reactions. Either their eyes glaze over, bored at the mention of the word, or their eyes widen with a sense of impending doom. We know it isn’t everyone’s favorite topic, but if you give budgets a chance, they can be one of the simplest tools you can implement to get your practice on its way to meeting (and even surpassing) financial consulting services dallas. Let’s discuss three steps to take with a simple month-by-month estimate of your income, expenses, and profit for a one-year period to help you shape the future of your business.
Step 1: Set revenue goals In budgeting, it’s important to think through the revenue estimate. In doing so, you’ll inadvertently set revenue goals. To do this, we start by asking questions. If you want to generate $100,000 in collections next month, HOW are you going to get here? Is it realistic? How many patients will walk through your door on a daily basis, and how much revenue will be produced on average, from each patient? By using your own historical revenue per visit and visits per day figures, you can plan for your next year’s revenue. Do you plan to see more patients? Increase fees? Open more days? All of these decisions will be considered as you work through your revenue projections. The result will be a month-by-month revenue goal, and how you expect to make that happen, and might look something like this. “I will see 250 patients, will average $400 in collections for each, for a total of $100,000 in revenue, per month.” Remember to plan for holidays and vacation days. If your providers take two weeks off in July, you can’t expect July’s revenue to look like June’s.
Step 2: Plan for expenses Budgeting for revenue and expenses helps you understand arguably the most important factors to running a business: Do I have enough money? Am I making a profit? Once you’ve determined your revenue, use historical financial assessment dallas to predict your monthly expenses. Some expenses will be the same each month, like rent and payroll. Review last year’s financials month-by-month to see what costs tend to be consistent. Others, like supplies, will vary as your revenue does. As your revenue increases, these costs will go up. Once you have your expenses mapped out, you can see what’s left over and determine if you have what we believe to be one of the best phrases in finance: extra money. With your extra money, can you afford to make the additional investments you’ve wanted in your practice? Perhaps you hire a practice manager or expand into a new operatory or treatment room. If you don’t have extra money, you have a simple question to answer: do you cut costs or increase revenue? It’s always better to know now than after you’ve overspent. Learn more about Skytale.
