While the demand for health services is soaring, it takes more than high demand to operate a financially successful healthcare entity. Sound financial principles and accounting best practices are necessary for a financially sound organization. Here are key strategies for healthcare accounting to boost your financial success.
Utilize the Accrual Accounting Method
There are two accounting methods: cash accounting and accrual accounting. Your healthcare accounting practices should embrace the accrual accounting method.
The accrual accounting method recognizes expenses and revenues when they’re incurred or earned. While the accrual method is more complex than the cash method, it provides a more accurate look at your company’s current financial position. This allows you to make better, more informed decisions about matters that impact your organization’s finances.
Use Your Accounting Records for Strategic Financial Planning
Strategic financial planning encourages you to use your accounting records to make sound financial decisions. Your decisions will have data to back them up, and you’ll have an accurate idea of your company’s current financial situation.
Your financial planning strategies should track all your expenses so that you know where your money is going. This will prevent future cashflow concerns and ensure that you’re able to accurately forecast future expenditures.
Thorough records enable you to see what expenses are failing to increase your organization’s profitability. You can then decide if those expenses are necessary to continue to supply a high level of patient care or if it’s possible to reduce these expenditures and improve your bottom line.
You’ll have accurate financial records to assist with your planning and future financial needs. These records can help you decide what short and long-term changes you need to make to increase your organization’s financial health.
Embrace Automated Financial Processes
Automated financial processes help you reduce your long-term costs while increasing your efficiency and future profitability. You’ll decrease the errors associated with manual financial processes while reducing the amount of time spent on time-consuming financial tasks.
While the technology for automating your financial processes will initially increase your expenses, most healthcare entities find that it quickly pays for itself.
Consider Streamlining the Suppliers You Use
Lowering your expenses is one way to increase your chances of financial success. It’s common for healthcare entities to work with a slew of different suppliers to acquire all the equipment and materials they need.
However, the more suppliers you work with, the harder it is to keep track of your equipment and materials inventory, increasing your chances of ordering too many supplies that will eventually go to waste.
Reducing the number of suppliers you work with can assist your organization in reducing supply waste and excess buying, helping your company lower its expenses without sacrificing patient care.
Work with an Experienced Healthcare Accounting Firm
An accounting firm that has experience handling financial tasks for healthcare entities is an asset to your organization. Using an experienced accounting firm will keep your records up-to-date while offering valuable input on how potential decisions affect your financial future.
A qualified healthcare accounting firm will ensure you comply with generally accepted accounting principles (GAAP) in your business practices. Following GAAP provides you with the in-depth financial records required to procure funding to assist with growing your organization.
Gurian CPA Firm understands the complexities that impact healthcare accounting. We use a proactive approach to increase your company’s success and profitability. Our team will help you achieve meaningful financial insights while you work to grow your organization. Contact us to request a meeting.
