To avoid a cash-flow crunch, ensure that your revenue is adequate for your practice

Stethoscope-On-Indian-Rupee2Physicians who run their own clinics have many responsibilities: patients, employees, facilities, and their own income. Carefully tracking revenue and expenses must be a top priority, however, because a clinic cannot survive without adequate funding.

Pragnesh Vachharajani, MD“Financial review is a must for any business. In addition to stimulating growth, a review enables you to identify problems that need to be addressed.”
—Pragnesh M.Vachharajani, MD, family physician with a special interest in obesity and lifestyle-related disorders in Ahmedabad, Gujarat, India and a member of mdCurrent-India's Editorial Advisory Board.

Although controlling and monitoring cash flow is important, these activities do not need to dominate your professional life. Here are some pointers on how to keep your practice financially healthy:

Key Point: Monitoring revenue requires only a little extra time, but will be very beneficial for the long-term health of your clinic.
  • Forecast your revenue and productivity.
  • Compare your data to targets.
  • Ensure that your staff collects monies owed for your services promptly and in full.
  • Conduct short, frequent financial reviews to spot problems sooner.

Revenue and productivity forecasts

All businesses—including clinics—must estimate how much revenue they will collect and determine if that amount will cover their operating expenses. Usually these forecasts are based on historical data. But even owners of new clinics can predict earnings.

New clinics should base revenue forecasts on...

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