Running a busy medical practice requires tackling accounting and tax compliance issues that most doctors and dentists never anticipated before opening their doors. Although you entered the medical field to work with patients, some days you may feel more like an accountant. To properly monitor the financial health of your practice and implement the medical industry’s best accounting practices, turn to THT Tax and heritage interpretation Accounting. Our Northern New Jersey CPA firm specializes in medical practice accounting services. We’re uniquely positioned to provide the accounting services, tax strategies, and practice management solutions your healthcare business needs survive and thrive. Large health care organizations pretty much have to use either medical office accounting software or medical billing services (we’ll come back to that).

Gusto gives business owners total control over the payroll process and all of the factors that come with staffing. Reduce the headache and countless hours filing payroll taxes, checking timecards, and managing employee benefits—Gusto does it all. It is easier than ever to run a business from a computer, and the financial business of a medical practice is no exception. Taxes are filed online, bookkeeping can be automated and software can now give you a snapshot of your financial health in a matter of seconds. By digitizing your financials, you lower your risk of error significantly and increase efficiency.

Financial Documents You Need for Proper Medical Accounting

Timely and accurate recording of revenue and expenses enables doctors to analyze their financial performance, identify trends, and make necessary adjustments to improve profitability. As your medical CPA firm, we’ll do more than provide top-notch accounting services and a proactive tax plan, we’ll become your trusted resource for financial advice. As your practice evolves, we’ll be with you through various stages of growth and expansion to provide the optimal financial solutions and the tax strategies you need to grow profits and your personal wealth. Best of all, when you need our advice most, we’ll make ourselves available to answer questions and discuss any major business decisions that could impact your finances.

We can take over all your accounting and bookkeeping  so you don’t have to manage an in-house bookkeeper or accounting department. This story is part of a series on medical accounting written by Nicholas Turturro at MBSATA, the largest independent bookkeeping firm in New York City. For example, variable analysis is one great way to identify extraneous expenses and improve your overall profitability. It involves creating budgets for your expected costs, comparing them to your actual numbers, and investigating the differences. You may still need to acquire a few tools for whatever your PMS can’t help you with, such as accounting and payroll services. Before committing to any products, make sure you’ve chosen ones that can interface with each other seamlessly.

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Patient care can be your main priority, but your medical practice is also a business. As a result, you need to take the time to review your financial statements and reports to draw conclusions that can inform your business decisions. As a result, the accrual basis is much better at matching revenues with expenses and accurately representing your business’s financial situation. However, it makes cash flow monitoring harder, so remember to track that separately. The cash basis of accounting involves recognizing revenues when you receive them and expenses when you pay them. Meanwhile, the accrual basis recognizes revenues when you earn them and expenses when you incur them.

Another potential alternative to health care accounting software is a medical billing service. If you realize that you only need help managing your finances, you may want to compare medical billing software to medical billing services. Accurate and efficient medical practice accounting is crucial for several reasons. By maintaining robust accounting practices, doctors can optimize their revenue, manage expenses effectively, and achieve long-term financial stability. Many health care providers try to handle their books on their own using QuickBooks or another DIYaccounting software solution.

Tax Planning and Preparation

We can help your medical practice develop internal controls, establish effective reporting procedures and streamline your overall operations. We guide our clients through complex tax issues and provide easy-to-understand financial statements to help you manage cash flow better and stay on top of your monthly finances. Cash accounting, on the other hand, only records revenue and expenses when the transaction has been finalized. It’s a simple, straightforward method, and it can be sufficient in certain industries with less complex accounting requirements.

Financial forecasting goes beyond budgeting and involves projecting future financial outcomes based on historical data and expected changes. This allows doctors to anticipate financial trends, make informed decisions, and take proactive measures to achieve financial stability and growth. The cost for new equipment, technologies, invoices from suppliers, along with everyday expenses such as rent, communication, and utilities can lead to an inbox pile-up if you’re doing everything on paper. Utilizing a cloud-based accounting app to manage bill pay (we love Bill.com) will allow you to easily receive, track, approve, pay, and categorize bills. It’s critical to have a consistent approval process, and you’re more likely to stick with it if it’s automated.

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Cloud-based medical billing software is becoming more prominent and is also a viable option. In most cases, medical practices only require basic billing software, but if your system is not up to date, you may want to consider upgrading to a billing management program. The extended framework includes features that will help you manage your entire facility. Features include using it for scheduling, storing electronic medical records and assessing imaging. When you opt for outsourcing, your staff will forward bills and other financial documents to a medical billing service provider.

Owning your own medical practice is an exciting prospect, but it comes with additional accounting responsibilities. While you’d probably prefer to focus on providing healthcare services to your patients, you can’t afford to ignore the business side of your operation. Staying on top of accounts receivable is crucial for maintaining a healthy cash flow in your practice.