Most physicians don't have a lot of extra time or experience to pour over financial statements, understand what they present and how they impact the practice. This is where your CPA can help.
The financial component of your practice is a complex and important aspect of your business and personal goals, making the relationship with your CPA an important component to your trusted advisory team. As a result, the process of selecting and building a relationship with your CPA advisor is an important task. The right advisor should help you mitigate risks and navigate roadblocks to help you achieve your business and personal financial goals.
Over time, CPAs have created a foundation of trust with clients, traditionally built upon services such as tax return and financial statement preparation — services that use historical data to comply with regulatory requirements. Although, compliance is an important and necessary function of CPAs, their added value is their capability to take this historical data and provide strategic advice that helps your practice run and grow.
Armed with this knowledge, your CPA can provide advice such as helping to identify excessive business costs, weighing the cost benefit of EHR compliance and its related incentive programs, or monitor billing and collection functions.
What to expect
Today’s CPA has evolved service offerings to bridge the chasm of services, shifting from being compliance focused to helping business owners think forward. You should expect your CPA to add value to your business by providing insight and education in the financial arena of your business, and combining this with your overall personal financial situation so you can focus on practicing medicine.
Most physicians don’t have a lot of extra time or experience to pour over financial statements, understand what they present and how they impact the practice. This is where your CPA can help you manage the future of your business and your personal financial goals by providing the following services and tools.
Monthly or quarterly key performance indicators
These could be in the form of graphical representations illustrating important financial and operational data, such as payer mix, receivable aging, co-pay collections, staffing costs, etc. This data allows you to see at a glance where your business is headed and make adjustments early if necessary.
Comparing your data to industry benchmarks
While it is useful to know how your business has evolved year to year, it is sometimes even more beneficial to know how you stack up against your peers. This analysis can help focus your attention on the areas of your practice that might be underperforming compared to industry and ensure your practice is being run both efficiently and effectively.
Detailed personal financial planning
Many physicians have ancillary revenue streams from building ownership and other investments in addition to their practice. Incorporating these income streams into an overall personal goal discussion will ensure your complete financial picture is being considered in decision-making and goal setting.
Understanding your practice’s cash flow cycle and how it impacts you personally is important to ensuring your known liabilities, including when tax estimates will be met, eliminating last-minute headaches and financial surprises.
Having a CPA who provides these additional services will help to create a complete income and cash picture to aid in tracking your goals.
There is no cookie cutter approach that a CPA can take to provide you with services to meet your needs; each physician has his or her own set of unique issues that should be thoroughly discussed and revisited. It takes time up front to learn about your specific business and personal circumstances in order to align your expectations and services. Once a plan is established your CPA can monitor progress by revisiting your service plan annually.
Get more out of your CPA relationship
If you don’t feel you are getting what you should out of your CPA relationship, consider why this might be the case. Is your CPA thoroughly involved and knowledgeable in your overall business and personal goals? Do you or your CPA view the relationship as a compliance only function? If so, the first step to enhancing your current relationship would be to set up a meeting with your CPA.
Approach the meeting like it is your first introduction to your CPA and his or her services. Be prepared to share your business and personal goals with your advisor. Understand the scope of services he or she offers and share your concerns about your business. This is where your CPA should take control and navigate your expressed goals to translate into ways he or she can help to achieve them.
Once the meeting is completed you will have a better understanding of your relationship and your CPA’s ability to take you beyond compliance.
Deborah Helton, CPA, is a Director at BiggsKofford, CPAs, a Colorado Springs based accounting and consulting firm. Mrs. Helton specializes in assisting physicians align their goals with simple tax strategies and business coaching to eliminate surprises and assess risk. Mrs. Helton can be reached at (719) 579-9090 ext 212, or via email at DHelton@BiggsKofford.com.
Austin Buckett, ACA, CM&AA, is a Manager at BiggsKofford Capital and specializes in helping clients acquire, grow and exit their businesses as a licensed investment banker within Mergers and Acquisition arm of the company.
Mrs. Helton is a proud member of the National CPA Health Care Advisors Association. The HCAA is a nationwide network of CPA firms devoted to serving the health care industry. Members provide solutions to the accounting and financial needs of physicians and physician groups. For more information contact the HCAA at firstname.lastname@example.org.