Bookkeeping Basics for Chiropractors
If you're like most chiropractors, you wonder if you have a handle on the bookkeeping basics for chiropractors.
You can perform a spinal adjustment with utmost finesse. But you may feel a little less confident when it comes to business bookkeeping. Sure, you can manage money reasonably well, and balancing a spreadsheet isn't too tricky.
Something is telling you there's something you're doing you could do better when it comes to bookkeeping...
Whether you're looking to improve accuracy and efficiency or simply troubleshoot a specific problem, these bookkeeping basics for chiropractors will point you in the right direction.
The primary purpose of bookkeeping is reconciling financial information so you can make informed business decisions. Inaccurate information forms the basis of your business decisions if you don't reconcile your books appropriately.
The result? Problems like internal theft, unpaid bills, uncollected receivables, tax delinquencies, and unpleasant run-ins with the IRS often occur.
When reconciling your account, be sure to include the following:
Point of sale transactions
Company bank accounts
Medical insurance billing
Accounts payable
Accounts receivable
Cash flow
Credit cards
You can compose a complete profit and loss summary with this information and incorporate it into your monthly financial report.
Want to learn more about updating your business financial records? Click here.
After you reconcile your financial information correctly, you're ready to make informed decisions based on those results.
Ask yourself:
For most chiropractic practices, it's employee payroll. Facility and equipment costs follow this. But, if you notice you're spending much more than average on business expenses, you might want to check out why that is. Finding another vendor might also be wise.
As your practice grows and money starts coming in, be aware of actual profit and how much you should designate for expenditures. Just because you see an increase in your bank account does not mean the money is spendable.
Knowing where your money is coming from can help you check the success of your practice.
For example, are accounts receivable paid quickly? Or are you actually seeing a growing number of office visits? Is there an increase in new patients, or are returning patients visiting more frequently?
Finding the answers to these questions allows you to divide your time to make even more progress.
As you review your reconciled financial information, you can determine any numbers that don't line up and pinpoint oddities. By keeping your books current, you'll catch most mistakes and quickly put new protocols in place before stumbling into a situation that could take months to resolve.
Like good nutrition, exercise, and an aligned spine keep a body healthy, good bookkeeping techniques help your chiropractic practice thrive.
Avoid common bookkeeping mistakes chiropractors make by:
Separating your personal and business finances.
Using accounting software instead of a simple spreadsheet.
Managing your practice by your finances, not by your bank account.
Remembering these tips when doing your books will keep your monthly reports accurate, prevent financial data from being poorly represented, and give your practice more growth opportunities.
As the saying goes, time is money. What are you and your employees spending the most time doing, and are those tasks profitable for your practice?
Most chiropractors find that when they are solely in charge of bookkeeping, they cannot focus on their practice as much as they would like. Rather than building relationships with patients, they sit at a desk. As a result, office managers have all or part of the bookkeeping responsibility put on them.
Yet, office managers might not have the training to handle the wide range of small business financial details the way professional bookkeepers or certified public accountants do.
Office managers overseeing bookkeeping cannot attend to administration tasks fitting their job description. Instead of helping the practice run smoothly, they are combing through numbers and doing so much more slowly than a professional. This adds up fast if you pay them hourly.
If office tasks are incomplete, the entire practice suffers: employees become frustrated, turnover rates increase, and patients leave.
As you re-evaluate your practice's bookkeeping process, you may find the time you spend crunching numbers is better spent elsewhere. If this is the case, we highly recommend considering outsourcing your bookkeeping.
Here are a few benefits of doing so:
With the time you spend on bookkeeping, you can improve your chiropractic office and focus on more high-leverage activities.
You will only pay for what you need and save money by cutting productivity costs.
Because experts in the field will do your books, you can be confident in the accuracy of the results and can run your practice accordingly.
Your team can focus on what they do best rather than financials, improving your patients' experience as a result.
Instead of having one person responsible for your practice's bookkeeping, you will have access to an entire team, which means more consistency in bookkeeping best practices and more application of financial strategy.
You'll have access to some of the best bookkeeping programs, which will back up and save your data for years. This makes it easy to retrieve financial records later down the road.
Here are some tell-tale signs it's time to outsource your chiropractic practice's bookkeeping to read next.
At Two Roads, we designed our business bookkeeping services for chiropractic practices like yours. We want your practice to run smoothly!
Then, you can enjoy what you do without worrying about whether your business's financial side is aligning with your goals. Instead, you can focus on growing your practice and caring for patients when you allow us to take care of those details.
Want more information on how to take the next step? Book a time to chat using our online form or call us at 865-212-0063.
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This article was updated in 2023.