3200 Riverside Drive, Columbus, OH

Transcription

1 3200 Riverside Drive, Clumbus, OH WRITE AN RX FOR YOUR SUCCESS Denise L. Tumblin, CPA WTA Veterinary Cnsultants 3200 Riverside Drive, Clumbus, OH Phne: Financial security fr yur practice and yur family takes planning and paying attentin. Where d yu begin? Take these steps tday t ensure a strng, stable future. 1. Establish effective dcumentatin systems. Use veterinary and accunting sftware and a Management Statement t manage yur patient and financial recrds. Execute partnership/sharehlder cntracts, a buy/sell agreement, lease agreements fr equipment and the facility, emplyment agreements, etc. 2. Create a fundatin fr effective practice leadership. Identify the leaders, dctrs, and advisrs required fr practice success. Establish and define respnsibility fr areas f management fr the wners. Create an internal cmmunicatin structure. Establish and define the management psitins at the staff level. See Cllabrative Teamwrk Charts. 3. Envisin the ideal healthcare team. Determine the key psitins and the number f supprt staff needed t meet patient care and client service gals. Define the parameters fr selecting the right peple fr each psitin. Establish the pay scale by psitin and fr each level f cmpetency within each psitin. Identify the training and educatin required fr cntinued grwth. Define the evaluatin and prmtin prtcls fr yur practice. 4. Determine if the facility cnfiguratin and size cntinues t meet yur clients and patients needs. D yu have a well-designed site and flr plan with ample parking, a sufficient number f exam rms, and ample treatment and surgery areas? Des yur lcatin cntinue t be desirable? Is it visible, accessible, and have rm t grw? Pay attentin t yur physical appearance the grunds, building, and staff must present a prfessinal, clean, well-maintained image. Stay in tune with yur envirnment t ensure it s stress-free, warm and welcming. 5. Develp a practice budget. Start with the infrmatin yu already knw yur current year-t-date revenue and expenses. Als cnsider any additinal gals yu want t achieve. Lastly, lk at benchmarks set by ther practices t get an idea f spending levels (see Benchmarks 2015 A Study f Well-Managed Practices at Benchmarks, r Financial Prductivity Pulsepints by AAHA). Keep this data handy as yu plan yur revenue and expense changes fr the cming year. Revenue. Hw much will revenue grw next year? Cnsider planned fee changes, cmpliance initiatives that will result in prviding mre f existing services, and new services yu re adding t the practice such as laser therapy, ultrasund, behavir cnsulting, rehabilitative therapy, r acupuncture. Expenses. Hw will yur perating expenses change next year? Have yu targeted a reductin in sme line items like inventry csts? Are yu planning increases in ther items like staff cmpensatin r equipment purchases? Determine where yur spending will remain the same, drp r rise. Cpyright 2016 by WTA Veterinary Cnsultants. All Rights Reserved.

2 6. Develp a persnal budget. Tracking yur persnal husehld incme and expenses and develping a budget prvides an rganized, systematic apprach t efficiently measure and analyze yur persnal financial psitin. Begin with the infrmatin yu already knw yur current year-t-date incme and expenses. Then cnsider any changes r new gals fr the cming year. Incme - Is yur share f incme frm the practice r any ther businesses yu wn likely t increase r decrease? Is yur spuse/partner expecting any increases r decreases in incme? Prject hw yur husehld incme will change fr the cming year. Expenses Hw will yur required expenditures change in the cming year? Cnsider lan/lease repayments n credit cards, auts, yur hme, r any ther debts. Plan fr any expected increases in prperty taxes, insurance, utilities, medical expenses, and aut expenses. D yu have any hme repairs n tap? What abut alimny r child supprt? Cnsider any changes t discretinary expenditures like clthing, travel and vacatins, entertainment, club dues, gifts and charitable cntributins, etc. And, dn t frget abut cntributins t savings and retirement accunts r yur children s educatinal funds. 7. Manage yur debt. Maintain a Debt Wrksheet that tracks all utstanding lans and leases and includes the riginal debt amunt, payff date, interest rate, mnthly payment, and current utstanding balance. When yu ve gt extra cash, make additinal payments n lans with n pre-payment penalties t reduce the interest paid ver the life f the lan. Apply the extra payments twards the highest interest-rate lans first. 8. Have apprpriate insurance cverage. Talk with yur insurance representative t determine yur persnal and practice needs, including: Aut: cnsider bdily injury, prperty damage liability, persnal injury, uninsured r underinsured mtrist, and cllisin and cmprehensive cverage Hme prperty insurance: prtectin fr yur dwelling, ther structures, and persnal prperty, reimbursed living expenses, fld, earthquake, water backup, identity theft restratin, and a persnal umbrella plicy. Practice prperty insurance: tw types f plicies - named-perils plicy, which nly cvers lsses resulting frm particular events named in the plicy, and an all-risk plicy (als knwn as special frm cverage) which cvers all events except thse specifically named. The type f business and yur lcatin and regin f the cuntry are all cnsidered when determining which risks are mre likely t affect yur business. Prperty insurance cvers lss frm fire, theft r vandalism, prvides financial assistance t help cver the cst t rebuild r repair business prperty s that peratins can cntinue with as little disruptin as pssible, and includes cmpensatin t repair damaged business prperty r replace what yu've lst. Other available cverage includes undamaged stck, data r recrds, cmputer virus, intangible cverage, ff-premises prperty, and terrrism. Emplyment Practices Liability Insurance: prtects against claims filed by disgruntled emplyees. Health Insurance: prvides cverage fr medical csts. Liability/Malpractice Insurance: prtects prfessinal advice- and service-prviding individuals and cmpanies frm bearing the full cst f defending against a negligence claim made by a client, and damages awarded in such a civil lawsuit. Cpyright 2016 by WTA Veterinary Cnsultants. All Rights Reserved. Page! 2 f! 5

3 Wrkers cmpensatin: ffers payments t emplyees wh are (usually) temprarily, unable t wrk because f a jb-related injury; cmpensates fr ecnmic lss (past and future), reimbursement r payment f medical and like expenses, general damages fr pain and suffering, and benefits payable t the dependents f wrkers killed during emplyment. Disability Insurance: designed t replace anywhere frm 45-60% f yur grss incme n a tax-free basis shuld a sickness r illness prevent yu frm earning an incme in yur ccupatin. Business verhead expense: reimburses a business fr verhead expenses shuld the wner experience a disability. Eligible benefits include: rent r mrtgage payments, utilities, leasing csts, laundry/maintenance, accunting/billing and cllectin service fees, business insurance premiums, emplyee salaries, emplyee benefits, prperty tax, and ther regular mnthly expenses. Life Insurance: prvides cash t yur beneficiary(s) in the event f death. Life insurance prceeds are ften used t fund the purchase/buy-back f a deceased partner s share f the practice. 9. Review cntracts and agreements regularly. Review Emplyment Agreements annually, practice Operating Agreements every 3 t 5 years and whenever yu re planning a partial r full practice sale, and Buy Sell Agreements every 3 t 5 years and whenever yu re planning a partial r full practice sale. 10. Clean up yur financial recrds. Eliminate the mixing and mingling f persnal and practice expenses. Be sure that the practice financial statement reflects nly the perating expenses f the practice. Prepare and review the practice s financial statements n a mnthly basis. Prepare separate, cst-center financials if yu re a mixed animal r multiple-lcatin practice. 11. Cnduct annual Strategic Planning meetings. Strategic planning is a must fr businesses t excel and mve frward. T determine where the practice is ging, yu need t knw exactly where it stands, then determine where yu want t g and hw t get there. 12. Cmplete a financial security plan. Financial planning entails identifying yur desired standard f living/incme needs, yur existing surces f incme and the value f yur investments, and the value f yur practice and any ther businesses yu wn. See figures 1 and 2 and see Identify wh will buy yur practice. Will yu sell t an existing partner, a current r future assciate, an utside independent practitiner, r a crprate cnslidatr? 14. Prepare yur buyer. If yu re planning t sell t a current r future assciate, develp a plan t mentr him r her abut the business f veterinary medicine, invlve the assciate in management decisin-making, explain the sale prcess, illustrate affrdability and discuss financing. Yu can t plan fr every eventuality, but using last year as yur baseline, learning frm yur mistakes, setting quantitative gals that can be measured, and creating a plan t ensure yu achieve yur gals will put yu well n yur way t accmplishing financial security. Cpyright 2016 by WTA Veterinary Cnsultants. All Rights Reserved. Page! 3 f! 5

4 Figure 1 Investment Surces Investments Persnal Practice Related Liquid Illiquid Practice Real Estate Persnal Retirement Real Estate Figure 2 Planning fr Financial Security Expenses Incme Living Expenses $ 110,000 Persnal Investments $ 700,000 Tax Liability 40,000 Practice Real Estate 700,000 Annual Cst f Living $ 150,000 Practice? Annual Cst f Living $ 150,000 Future Value f Investments withut Practice $1,400,000 Return n Investment 6% Investment Base Required $2,500,000 Target Value $2,500,000 Value withut Practice 1,400,000 Shrtfall $1,100,000 Cpyright 2016 by WTA Veterinary Cnsultants. All Rights Reserved. Page! 4 f! 5

5 !! Cllabrative Teamwrk Organizatinal Charts Cpyright 2016 by WTA Veterinary Cnsultants. All Rights Reserved. Page! 5 f! 5