18 February 2015

It’s easy to put off creating a budget. When you’re running a busy practice, budgeting can seem like a time-consuming, low-priority chore.

But, just like any other business owner, you have to know how much revenue you need to generate to cover outgoings such as rent, wages and tax. And a budget can also play a positive role in helping you to run your practice more smoothly and productively.

“When you’re keeping track of your finances it’s much easier to identify and take advantage of opportunities,” says Stephen Allan, Credit Executive at Medfin Finance. “You’re also more likely to spot any areas of concern in time to address them before they become major problems. Without a budget you have no benchmarks for measuring your progress – it’s impossible to know for sure whether your practice is becoming more profitable or going backwards.”

Help with decision-making

A business plan that incorporates your overall strategic goals and objectives is an invaluable decision-making tool – but only if it’s up to date. “A budget is a dynamic thing, not something you can just set and forget,” says Allan. “Economic uncertainty, changes to legislation and healthcare reform can all have an impact on the finances of a practice, as can more local issues such as a new competitor or adding a member of staff. These kinds of things all need to be factored into the budget as they arise.”

Budgeting for tax

Failing to budget for tax can be a danger zone for people with their own practice. “It’s certainly the cause of financial difficulty that I see most frequently,” says Allan. “When you’re running your own business you have to build tax and other statutory payments such as superannuation and GST into your budget. If you can’t pay the full amount when it falls due you could face serious penalties, and trying to catch up can create a great deal of stress.”

Make the most of your time

Allan recommends starting with expert advice. “Business structure, insurances and asset protection strategies are fundamental to any budget and a qualified accountant can ensure you have the right ones in place,” he says. “An accountant can help you to develop the budget itself, and to establish an appropriate in-house accounting system.

Once this is in place, a good practice manager can then manage the day-to-day bookkeeping with regular oversight from your accountant. In a one-person practice, the right receptionist will be able to take on the role. “All you’ll need to do is review it on a regular basis, which shouldn’t take a great deal of time,” says Allan. “You should also find that that the practice is running more smoothly, so you could actually have more time to spend with your patients.”

Create a positive first impression with your waiting room

Your waiting room can influence how your patients feel about you and your practice. Caroline Chaplin, Director of Rooms With Style, explains how colour, lighting and soft furnishings can help you convey the right message in a cost-effective way.

Six strategies for creating a safer medical practice

Medical practitioners often put their patients first – but the price could be compassion fatigue. Dr Frank Jones, President of the RACGP, and Dr Frank Meumann, President of the region’s Balint Society, explain how sharing experiences can have a positive impact.

Ceo Seat: Trish Hogan on transforming Pindara Private Hospital

As CEO of Pindara Private Hospital for the past seven years, Trish Hogan has steered more than $110 million worth of development, transforming the Ramsay Health Care-owned operation into the largest and most comprehensive private hospital on the Gold Coast.

Experience and personal passion drive new Head of NAB Health

Digital innovation as well as increasing demand for Australia’s health expertise overseas are two of the big opportunities ahead for the local healthcare sector, says NAB Health’s new General Manager, Cameron Fuller.

Let's talk

We’re ready to help

Have us call you
Looking for a specialist?
Tell us about your experience