Medical Practice Management
Jun 16

Learn to budget wisely when creating a medical office

If you're just starting to build a medical office, craft your best estimate of what will happen in the upcoming year as straightforwardly as possible. As you compare each month's actual results to your projections, you'll learn as much about the process as you will about your finances.

Don't worry about so-called stretch goals in your initial foray. While they might motivate doctors to strive for growth objectives, you can kill any enthusiasm for the entire budgeting process if you set targets too high. No one enjoys spending the whole year "behind the budget."

If you're an old pro at business planning, you'll have good reasons to set challenging goals and look at longer time spans. After several consecutive years of strong, double-digit practice growth, you might expect a natural slowdown. Planning for continued growth keeps the pressure to produce on physicians and employees-particularly if they're included in a performance-bonus pool.

Rather than inflating budget goals, include your best estimates in your budget and use the higher stretch goals as benchmarks for a bonus plan. This way, you'll keep your estimates true and still set ambitious goals.

p.s. Pay a visit to my microblog - www.twitter.com/rtacpa.com

 

About Reed Tinsley, CPA

As a top advisor to physicians, I help increase practice profits by delivering hands-on, expert medical accounting/tax support, practice counsel, and revenue-building strategies. Read more →