Physical therapy management or specifically managing your own private clinic covers a lot of areas which you need to focus on. One such area of physical therapy management is cash flow or the financial aspect of your business.
One of the primary reasons why a business fails, whether it’s just a small business or a huge empire, is failing to manage cash properly. Most self-employed individuals neglect their cash flow and suffer its dire consequences.
There are a lot of things that can help you avoid a situation like this in your physical therapy management. Here are some of them:
- Physical therapy management can mean you have to measure your cash flow accurately. You have to prepare income and expenses projections. You need to effectively close the gap between your cash outlays and your cash collections. This can be fixed by a solid cash flow plan. Do your cash flow projections and analysis regularly and as accurately as you can. Doing this will give you clear picture of how your business stands financially now and in the future.
- Physical therapy management means you need to improve your collectibles and account receivables. You need to improve the speed with which you collect from insurance or credit card companies. Most patients are covered with insurance or charge their fees through their credit cards and it might take some time to before you get paid. Follow all the guidelines and fill up all forms required accurately to avoid any delays when billing insurance companies. Have a timetable and follow it so you will a billing cycle or cut-off.
- Physical therapy management can also be managing your payables and making sure that expenses are not growing unnecessarily. If you have a credit term with your suppliers or creditors, take full advantage of it. Getting a more flexible term can also be a huge help in improving your cash flow. Do not have too much inventory on supplies and what not as this will tie up your cash.
- In physical therapy management, there are instances wherein cash shortfalls are unavoidable. The key to overcoming this problem is awareness, you have to know about it as early as possible and you have to include it in your physical therapy management plan. Prepare a solution even before the problem occurs.
The financial aspect of physical therapy management can make or break your private practice. Sales and income might be high but if you cannot control your expenses, eventually this lack of cash flow management will be your sure downfall.