Annual Checklist For A Profitable Practice

August 10, 2006

1. Do you maintain a plan of action for managing both revenue and expenses?

2. Does your financial record keeping give complete information about your practice?

3. Are the financial statements prepared monthly?  Are they prepared in accordance with Generally Accepted Accounting Standards (even if on the cash basis)?

4. Is there financial interpretation of those statements including a variance analysis?

5. Do you have a method of reviewing expenses to determine ways to reduce costs and to control increases?  Is this a regular part of the monthly financial statement analysis?

6. Are the financial statements prepared on the cash or accrual basis, and no matter, are they appropriately presented in a consistent manner?  If cash basis is used, are some accrual entries (e.g., depreciation) still recognized for more representative performance?

7. Are the financial statements illustrated in a comparative format with comparisons to both the budget and prior year?

8. Do you look for trends as they unfold by analyzing financial statements and review all areas of the practice as a measure of performance?

9. Does your practice administrator attempt to learn the meaning of the financial statements and the trends that can be understood from their review?

10. Do the physicians acquaint themselves with the operations of the practice and the financial results?  Do the physicians (especially the partners) understand the basics of financial analysis?

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