The death of a partner in practice forces physician to consider many facets of the practice operation, including the significance of accounts receivable.
When the "year-end closing" for our medical practice occurred in the last week of December that first year, I went with the flow. After 2 days of preparation, with papers flying all over the office, the group sat down to "settle up," with the office manager close at hand to track down any necessary documents. I was told to bring my checkbook and really nothing else.
We all sat in the conference room, me with my checkbook, while the other docs shuffled stacks of receipts and other documents. The managing partner had a legal pad with markings that only he could decipher. After 5 hours of reviewing the hard copy of all that had transpired over the previous year, they arrived at "the numbers."
I was told to write about nine different checks to five different people. In exchange, I received something like six different checks from three different people. I think that the checks I received amounted to more than the checks that I wrote, but I'm not absolutely certain of that. Finally, we all went out for a great dinner and drinks to celebrate our readiness for the next year to begin.
It was a great time in my life. I had two young babies; a burgeoning, young practice, and a new life in the suburbs. While we had no real idea how to buy a house and evaluate a mortgage, my wife and I took the plunge anyway and went to contract on a house, which was to close in early July.
But on June 30, exactly 3 years to the day that I had joined the practice, my mentor, "the big guy," the giant, the rainmaker, and the managing partner-died. I could not have been more devastated. Besides my love for this man both personally and as a physician role model, I was days away from closing on a house that I suddenly was worried about not being able to afford.
Suddenly, I had to worry about a variety of factors, including (in no particular order):
It was not long after my partner's death that his accountant called to discuss the execution of our partnership agreement, which delineated the payment to the estate of a deceased partner.