Doctors, Know Your Numbers
Just like a doctor evaluates an individual’s health by studying data from various tests that are conducted and then uses it to make informed decisions about the way forward, an organisation’s financial health is determined by studying its financial data and then using this information to make decisions about the future of the organisation.
Financial data encompasses a vast amount of information, however, not all numbers are necessary when making key decisions. Three key numbers that influence the successful running of a practice are revenue, profit, and cash. To keep revenue and profit at its optimum, it’s important that there is a budget for the practice to keep track of income and expenses. A budget allows for measuring actual income and expenses against budgeted figures, creating accountability for revenue goals and controlling expenses. Another way to keep profit at its optimum includes regularly reviewing key expense items to ensure that the practice is operating effectively and removing unnecessary costs.
There are various ways that you could increase your practice’s capabilities and potential profitability. Some examples include implementing a strategic marketing plan; leveraging digital marketing (for example, social media); entering new markets or locations that were previously not considered; expanding your existing services; and reviewing your current margins and increasing these incrementally.
Knowing and tracking the financial numbers in your practice will help grow and develop your practice. Understanding what the numbers mean and the impact that they can have on your overall practice will allow you to make more informed decisions, ultimately contributing to the overall health of your practice.
If you need assistance with accounting or consulting for your organisation, contact us at email@example.com.