business

COVID-19 poses a considerable threat not only to our health but also to our businesses.

For many businesses, the steps the governments have imposed to contain the virus have resulted in a sudden and dramatic fall in demand for products and services, labour shortages and supply disruptions.

There are a number of actions you should consider to help manage your business through these uncertain times.

These actions should assist your business to survive and place it in the best possible position for revival.

Below is a list of actions you can undertake to help your business manage this difficult time.

We encourage you to speak with your accountant or other professional advisers to help you manage through this crisis:

1. Keep your financials up-to-date

To be able to make the best possible decisions, you need access to the most up-to-date information on the financial position of your business.

2. Act now to improve your cash flow

Improving cash flow, whether it be by getting more cash into the business or reducing cash leaving the business, or both, is essential to business survival. It should also put your business in a good position to take advantage of the recovery. You need to establish a Cash War Chest.

3. Increase online sales and keep in contact with your key customers

With customers staying at home, look to reach them through online sales platforms. At a minimum have an Ebay store and look at an Amazon store front. Then consider whether a Shopify website will work.

4. Develop a contingency plan.

If possible, put in place a plan to help your business continue operations if the government imposes tighter restrictions, such as staff working from home. Also consider is there an opportunity for your business to change direction with new service offerings.

5. Keep regular contact with staff

Remain positive but also be upfront with staff on the state of your business. 

6. Keep in contact with your key suppliers

Talk to your key suppliers about their ability to deliver reliably to you during the crisis. Consider alternative suppliers.

7. Do a regular financial health check on your business

Knowing the financial health of your business is essential to assisting you in deciding what you can and should do to manage through the crisis.

8. Take time to do a reality check

Ask yourself some questions about the performance of your business before the crisis to help you determine what you want your business to look like post-crisis.

9. If you are in financial difficulty, seek professional advice asap.

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business

Managing your business in a crisis

Practical strategies you can deploy straight away.

We are experiencing extraordinary events, first the bushfires, then the rain and now the impact of the coronavirus.

The impact of these are likely to see Australia enter into recession for the first time in almost 30 years.


For businesses to prepare and combat the effect of a recession, business owners must urgently review their business and prepare for such an event. To assist business owners (or your clients) through these troublesome times, below are some simple and practical ideas that business owners can implement during such a crisis. We can also assist business owners with this assessment.

Here is our 5-step process to crisis proof your business.
  1. Review
  2. Identify and build
  3. Execute and act
  4. Monitor
  5. Speak to us
1. Review

This is for you to focus on what is within your control and what your business key drivers are.

• Is your work environment for staff and customers safe?

• What expenses are key to the business operating and which are not?

• Are there any expenses that can be reduced without impacting the business’s long term viability?

• Which revenue streams have been or will be impacted?

• What actions can be undertaken to protect and maintain revenue?

• What obligations do you have to financial institutions, such as loans?

• What statutory obligations to you have in the short and medium term?

2. Identify and Build

Once you have determined the key drivers of your business then you MUST develop a plan.

Documenting the plan, allocating responsibilities, and setting agreed timelines is essential.
 
Ensure your staff and key stakeholders are supportive of the plan. Communication is key.

• Prepare a plan to ensure a safe environment for your staff and customers. How are you communicating that you have a safe environment to your staff and customers? How often are you communicating?

• Optimise revenue—what revenue initiatives can be undertaken to maintain a sustainable level of income—consider collection of debtors, sale campaign, alternative delivery methods (online). Are there new revenue lines that can be undertaken as a result of changing market conditions? But also be honest with the stock levels you have to your customers.

• Supplies – ask your suppliers if they can recommend alternatives if they’re affected by imports. If they can’t, explore finding alternative for your stock.

• Reduce expenses—a detailed review of business expenses should be undertaken to identify any expenses that can be reduced or even eliminated altogether. This could be a reduction in staffing hours, termination of unnecessary or non-essential services or even sale of surplus assets that are subject to finance.

• Deferral of expenses—are there any other expenses that can be delayed? Are there any creditors that are willing and able to provide support through relaxed payment terms? The Australian Taxation Office (ATO) can provide relief through the following initiatives:

 – Deferring (by up to four months) the payment date of amounts due through the business activity statement—including pay as you go (PAYG) instalments)—income tax assessments, fringe benefits tax assessments and excise tax.

 – Allowing businesses on a quarterly reporting cycle to opt into monthly GST reporting to get quicker access to GST refunds they may be entitled to.

 – Allowing businesses to vary PAYG instalment amounts to zero for the March 2020 quarter. Those businesses can also claim a refund for any instalments made for the September 2019 and December 2019 quarters.

 – Remitting any interest and penalties, incurred on or after 23 January 2020, that have been applied to tax liabilities.

 – Working with affected businesses to help them pay their existing and ongoing tax liabilities by allowing them to enter into low-interest payment plans.

 – Financier support—contact your financier to discuss what financial support is available (usually by way of deferred payment terms under the loan facility).

 – Consider government assistance—find out which government support applies to your circumstances.

3. Execute and Act

Urgently responding to these situations could include the following approach.

• Increase your sales through new sales approaches and new revenue lines.

• Increase exposure through other platforms to sell and market your business. Could platforms previously thought to not work for your business now be relevant? Consider ecommerce and social media to increase your businesses visibility and exposure to current and new markets.

• Communication must be open and transparent with employees, financial institutions, landlords, suppliers, the ATO, customers and local business networks. It should be regular and honest. 

• Implement relaxed payment terms. Make it easier for other businesses to do business with you. But  make sure you understand the financial impact this may have on your business.

• Enable staff to work from home if possible. Staff safety is paramount and non-negotiable.However, knowing what they need to be effective while away from an office environment will help speed up this process and streamline job functions/tasks during this period. Also ensure cyber security measures are in place.

4. Monitor

Regularly check on the financial position.

This means:
• Monitor on a regular basis.
• Adapt and change your plan, if necessary.

5. Speak to us

The current environment can be very daunting and we are available at any time to assist business owners that find themselves in a distressed position. We are experts in
providing advice and can provide the guidance that may be needed in these difficult times.
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business

What Is A Key Performance indictor?

A Key Performance Indicator (KPI) is a type of performance measurement used to monitor the success of targets in set categories within your business, which in turn calculates the performance and success of the activities and the business.

Why Have Key Performance Indicators?

Your KPIs should be linked with your key goals and strategic priorities. By evaluating the data gained from the KPIs it will lead to an understanding of the general practice’s position. Identify irregularities and guide future decisions. KPIs can help to:

  • Focus on continuing improvement
  • Ensure that practice activities are linked to overall strategies
  • Provide an early indication of emerging issues that may require remedial action
  • Plan for the future
  • Ensure staff know the direction and expectations of the practice and work towards those goals.

What Should Your Practice Measure?

Every general practice is different and will have different priorities. Priorities should be linked to the practice’s goals and strategies and should be relevant measures that can, over time, provide evidence or demonstrate performance results.

Where to Start?

There are no right or wrong KPIs for medical practices, as they should reflect the individual practice’s goals. However, all KPIs should be clear, focused, relevant and measurable in order to be comparable over time.

 

There are four basic methods used for measuring performance:

  • Costs – e.g., doctors service fees, support staff wages, practice expenses, administration expenses.
  • Profits – e.g. the amount of surplus after all expenses are paid
  • Quality – e.g. the aspect of meeting patients’ expectations
  • Time – e.g. the efficiencies relating to the number of patients seen per hours/session/day


A good starting point is to establish processes to record figures. Most information required may be extracted from your practice software.

 

Figures could be extracted daily or weekly for practices with multiple doctors, while smaller practices and solo doctor patients may prefer to use monthly system.

 

The information gained can be recorded and charted by tables, graphs and / or reports used as a tool to plot trends and identify anomalies.

Examples of Key Performance Indicators for a General Practice

Areas that could be relevant for general practice KPI’s are:

  • Financial performance = e.g. cash flow, return on investments, expenses, cost of keeping the practice open, percentage of claims denied by Medicare, fees generated per doctor per hour, total expenses per doctor per annum, average cost per hour of opening the practice, revenue generated by each doctor, total patient revenue, average patient revenue.
  • Patients – e.g., patient satisfaction, new patient numbers, total patient numbers, cancellations and appointment no-shows, number of patients that do not attend follow-up appointments, percentage of time spent per patient on consultation.
  • Employees – e.g. employee satisfaction, employee performance, break-even number of patients per day, ratio of private to bulk billing, number of patients seen per period/per doctor.
  • Medical data and patient services – e.g. percentage of diabetes/asthma patients, patient responses to recalls.
  • Expenses – e.g. monitoring individual expenses will give a better understanding of expenses and ways to manage them.


Examples of how to calculate a KPI

The practice wants to know how much each visit on average contributes in financial terms to the practice.

To calculate, take the total revenue for the period you are working on, and divide it by the total visits for the period.
  1. The average visit value will indicate how much revenue is generated by each patient and will aid in determining policies such as discounted consultations.
  2. Compare how many patients each doctor consults and work out the productivity in terms of financial gain. By knowing this information, you can investigate if there are any problems in inefficiency, a mismanaged schedule or if there is a clear decline in appointment requests.
  3. Track missed appointments and cancellations by utilising a simple graph for each doctor. It is wise to track missed appointments, as it can cost the practice a lot of money in missed revenue over time. The remedy may simply be improving schedule patterns or adjusting staff processes.
  4. You may wish to determine if your patients are satisfied with the services, doctors and experience with the practice. A means of gaining this information could be through a patient questionnaire e.g. by asking “would you recommend this practice to others?” Use a scale of 1 as the lowest score to 5 as the highest and calculate the overall score. Also, ask for their reasoning behind their answer.

 

All results should be analysed, and action taken where necessary, or in the case of encouraging feedback, used as positive reinforcement that the practice is meeting their goals.

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Over the years we have worked with many medical professionals across many specialisations. This great level of experience means we understand the medical profession.

 

In this medical practice checklist, we discuss key areas you need to consider.

 

BUSINESS STRUCTURE

The structure you choose to operate from can make a massive difference to your wealth and financial security. Each structure has its own benefits and limitations, but it is important to choose a structure that meets your individual circumstances, is in accordance with ATO guidelines, while at the same time yielding any additional tax benefits.

 

  • Is your structure compliant with ATO guidelines?
  • Does your structure ensure you meet payroll tax, superannuation, WorkCover and employee leave entitlement obligations?
  • Does your structure provide opportunities for tax planning?
  • Does your structure provide adequate asset protection?
  • Do you have the appropriate documentation in place for your structure?
  • Do you have agreements in place with your business partners?

 

TAX PLANNING

As a medical professional it is likely you will be in the higher income brackets, and therefore be expected to pay a fair share of what you earn in tax. However, there are certain tax planning strategies that can be implemented to effectively manage tax liabilities, while still ensuring you are compliant with ATO guidelines.

 

  • Are you taking advantage of the unique tax planning opportunities available to medical professionals?
  • Do you meet with your accountant at least once a year to discuss tax planning strategies?
  • Is your debt structured correctly to ensure you maximise the tax deductibility of interest? Do you know the difference between good and bad debt?
  • Do you have a structured plan for your superannuation and contributions?

 

 

TECHNOLOGY & SOFTWARE

With cloud technology and software available for almost every role and purpose, the facilities available to medical professionals to streamline processes and reduce costs are huge. The hardest part is working out what is most suitable for your practice.

 

  • Do you use cloud-based accounting software?
  • Are you aware of the various add-ons available for you accounting software to automate & streamline processes?
  • Are you utilising your software to the fullest and have you been provided with adequate training?
  • Are your automating steps with technology to improve efficiency and reduce costs?
  • Is your accountant familiar with the software available to medical professionals?

 

THE POWER OF COLLABORATION

The life of a medical professional can be a very stressful one with competing demands on you time being at the top of the list. Efficiencies gained from having everything ‘under the one-roof’ should never be overlooked.

 

  • Is your medical practice and associated entities accounting and taxation all done by the one team to streamline the process and reduce costs?
  • Are you able to speak with your Advisor about lending, investments and insurance?
  • How much time do you spend working on your business to understand how to identify efficiencies in operation, implement process improvement ideas and best practice solutions?

 

INDUSTRY EXPERTS

Having solid knowledge of the medical profession ensures an understanding of the professional life-cycle of medical professionals. The medical profession is unique and therefore to get the best advice you need to make sure you have the right people ‘on your team’.  Professional understanding, technical knowledge and proven results are critical attributes you should look when selecting your team.

  • Has your advisor looked after medical professionals before?
  • Does your advisor have a great network of firms around them to support you in the successful operation of your practice and personal wealth growth?
  • Are you fully aware of all the financial opportunities available to you as a medical professional?

 

Want to talk about your Medical Practice to see if you are operating at your full potential, then contact us for a coffee and a chat.

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Tax Tips for Medical Practice Owners

Tax time is a headache for many doctors, let alone medical practice owners. Even worse when you are a doctor and a medical practice owner!

Not only are you paying a lot of tax, you need to stay compliant to avoid audits and issues with the ATO while still keeping as much cash flow in your medical practice as possible.

So how do you keep on top of your tax as a medical practice owner?

Get organised

Doing your tax should not just be once a year thing. You should be working and reviewing your tax position throughout the year to stay compliant and be prepared come year end.

You should be working with an accountant that specialises in the medical industry, who will understand your situation and requirements. You should have regular meetings with your accountant through the year to ensure you are on top of everything, including due dates, changes in tax laws and how they impact you and your business

Keep your records safe and easily accessible. Also, you should maintain separate files for personal and business-related documents.

Know your business structure and the rules

Every business structure has different tax responsibilities and requirements that need to be met. Medical professionals in particular have a specific set of rules that need to be followed.

Each structure also has unique features that you need to understand. Having this understanding will help you with your business and your legal requirements.

Know what deductions you are entitled to

The expenses you can claim as a deduction will depend on your practice – how it is structure and how it is run, but some common areas include:

  • Professional dues or membership fees
  • Professional and some personal insurances
  • Medical journal subscriptions
  • Medical and technical equipment
  • Superannuation contributions
  • The cost of managing your accounting

Being familiar with what expenses you can claim will likely see a great uplift in your return.

Keep your books up-to-date

Keeping your financials up-to-date will have multiple benefits to you: you should not be hit with any surprises, such as an unexpected tax bill, you will have current figures if you need finance, it will give your accountant the opportunity to look at your position and make suggestions to help your tax position before the end of the tax year.

 

You can automate things and streamline your business, use accounting software like Xero. You can also explore other practice management software that may integrate bookkeeping as one of their functions.

Get expert advice

The most important tip for a medical practice owner is to work with a medical accountant who understands your needs and your profession. Running a medical practice is unique, and a financial expert who specialises in your profession will help you identify opportunities and reduce risks.

Reach out to us if you wish to discuss your practice and your situation.

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As a dentist, you will face a unique set of financial challenges that not many other medical professionals have to deal with.

You will require an area that has multiple private treatment areas and a wide variety of expensive equipment.

But the question then becomes – how can you build a successful practice, run a business and achieve your financial plan without going into too much debt?

Do your research.

Building your own practice is rewarding and can provide you with a good retirement, if it is done right.

The questions you need to ask yourself are:

  • But should you start your own clinic from scratch?
  • Buy into a practice with other dentists or join a dental group?
  • Purchase an existing practice?

Each presents its own pros and cons. You will need to consider all before making a decision.

Know your market and pick the location accordingly.

The choices you make about who you wish to market your practice to and its location will influence the potential profit you generate.

Do your due diligence to find out what the demand for dental services and the amount of competition in a given location before progressing with your plans.

Don’t go too big, too quick.

You might be thinking to go big at the outset in anticipation of a big inflow of new patients. But you also need to be realistic about your potential growth. Utilise the space you have to its maximum before you make plans for expansion. Start your expansion only when your revenue and client base justifies it.

Purchasing dental equipment – have a plan.

Dentists will generally have to outlay a lot more to fitout their practice than most medical professionals, given the treatment chair and other specific tools you require.

Yes, you can pay cash, but that can impact the cash flow of the practice You can also go second hand or a lower quality product, but would that give the give the right impression for your practice or provide the best experience for you patients.

Financing the equipment may be an alternative. Medical professionals can, if you are able to find the right provider, get access to some great deals for finance. Make sure you get advice from a medical finance expert, who understands your practice, knows what you can afford and can find the best deal that is suitable to you.

If you decide to enter into a loan, you will need to understand and be aware of the cash flow impact on your practice and the legal implications that go along with the finance agreement.

Don’t under insure.

Insurance, for business owners, is quite often something they think about but never end up doing, or they take the cheapest option. Insurance should provide full coverage– protecting your expensive dental equipment, protect your practice, protecting your staff and your family and finances in the event something goes wrong.

Run a lean machine.

You don’t want to go cheap and cut corners, but the secret to saving your practice money lies in reducing your overheads. This may include changing electricity providers or review your supply ordering process (as you may be holing too much stock).

Are you overstaffed? Can new technology or automation streamline processes and same time and money?

This is an ongoing process so always review your costs as small changes all add up.

Be aware of your tax obligations.

Many medical professionals, including dentists, struggle at tax time. As a high-income earner, you will owe a lot in tax so it’s important to be prepared. Talk with your advisor to help you understand your position and if you can be doing things differently to help your tax position out.

Get advice

When it comes to accounting, finance and financial planning, it pays to work with the best people who know the medical profession

Contact us today to discuss how we can help with your practice.
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