- Managing your practice’s money is critical to your long-term financial success — but it can feel intimidating, particularly when you’re just getting started.
- Keeping an eye on your day-to-day finances and being proactive in financial management may help set you up for success.
- Smart money management can also help support your talent management strategy, as well as help you strengthen your personal finances.
It’s no secret that managing your practice’s finances can feel intimidating. Virtually all providers need support to maintain a financially successful practice — and they all learn important lessons along the way.
The good news? You may benefit from their experiences. Read on for top money management from five healthcare professionals — and what you can take away from their successes.
1. Keep an eye to cash flow
While there are several important financial metrics to track in your practice, cash flow — the amount of money flowing into and out of your practice each month — should be top of mind.
“I use cash flow as sort of a canary in the coalmine,” said Ameha[1], a general practitioner who runs a practice in midtown, Manhattan. “It lets me know early if I’m having trouble collecting payment, for example, or if we’re spending beyond our budget.”
Pro Tip: It’s relatively straightforward to manage your practice’s cash flow. Read our guide to cash flow management to learn more — or reach out to your small business banker for support.
2. Invest with ROI top of mind
From AI-powered technology to new equipment to a bigger space, there is no shortage of ways to invest in your practice. But it’s important to take a strategic approach — one that will maximize ROI in the long run.
“Before I make any significant investment, I weigh my options by measuring how each one will impact my practice financially over the short and long term,” says Barbara, a Denver-based pediatrician. “That way, I will know if it’s worth the short-term impact on my cash flow, and I also have a forecast I can compare to our real results.”
Pro Tip: Thinking of investing in artificial intelligence (AI)? Read our insights into how healthcare practices can leverage AI to tackle industry challenges, including burnout, heightened patient needs, and more.
3. Consider your financing needs — before you need financing
Navigating business financing can be intimidating: You’ll need to find a lending product that meets your needs and decide how much you want to borrow. If you don’t need the money, it can be tempting to put off the process.
But looking for financing early may have significant advantages. “I almost never use my business line of credit for my practice, but I feel more at ease just knowing that it’s there.” says Ryan, a Boston-based dentist. “It can help buffer my cash flow, or help me invest in the practice without the delay of applying for specific financing.”
Pro tip: Your practice’s credit rating impacts your ability to secure financing. Learn what a credit rating is and how to boost yours.
4. Look for cash-efficient ways to attract and retain talent
Healthcare providers across the industry are grappling with a skills shortage — and if you’ve struggled to find the skills you need to grow your practice, you’re not alone.
While enticing talent with greater compensation offers an obvious solution, it may not be in your budget. So when Jenna, a plastic surgeon based in Washington, needed to grow her team, she got creative.
“I had recently invested in automated patient outreach, so I pitched myself as a forward-looking employer who wanted to improve the employee experience, “ she explains. “Thinking about what employees want, beyond money, helped me gain a competitive edge.”
Pro tip: Offering a range of financial wellness benefits, like retirement plans, may help boost your employees’ financial security, even if you can’t offer them more money. Learn about how we can support your employees.
5. Take care of your personal finance
We understand: Focusing on your practice’s financial performance is more than enough to keep you busy. But it’s critical to have a plan for your personal finance too.
“I put so much energy into my practice, but it wasn’t until I sat down with my banker that I realized I hadn’t planned much for my own future,” says Rina, an optometrist based in Pittsburgh. “An advisor helped me come up with a realistic retirement savings plan, as well as a succession plan for the practice if I ever decide to step down.”
Pro tip: Our team of healthcare banking experts can help you create a financial plan for both your practice and your personal finances, and connect you to solutions developed with your unique needs in mind.
Learn more about our solutions for healthcare professionals.
