5 Financial Reports Practitioners Review Monthly

 

Here are the top 5 financial reports that healthcare providers who own their own practices should review on a monthly basis to ensure the financial health of their practices:

1. Income Statement (Profit and Loss Statement):
   • This report provides a summary of your practice’s revenue, costs, and expenses over a specific period, typically a month. It shows whether your practice is operating at a profit or loss. Key components include revenue from patient services, operating expenses (such as salaries, rent, and supplies), and net income.
2. Balance Sheet:
   • A balance sheet gives you a snapshot of your practice’s financial position at a particular point in time. It lists your practice’s assets (e.g., equipment, accounts receivable), liabilities (e.g., loans, accounts payable), and owner’s equity. Monitoring this report helps you assess your practice’s solvency and overall financial stability.
3. Aged Analysis:
   • This report tracks outstanding payments from patients and medical aids companies. It categorises receivables by the length of time they’ve been outstanding (e.g., 30 days, 60 days, 90 days or more). A high volume of aged receivables can indicate issues with billing and collection processes that need attention.
4. Cash Flow Statement:
   • Cash flow is crucial for the day-to-day operations of your practice. This report details the inflows and outflows of cash over a specific period. It helps you understand where your cash is coming from (e.g., patient payments, loans) and where it’s going (e.g., rent, payroll, supplies). Monitoring cash flow ensures you have the liquidity to cover expenses.
5. Key Performance Indicators (KPIs) Dashboard:
   • While not a traditional financial report, a KPI dashboard provides a concise overview of critical metrics for your practice’s financial health. Customise it to include KPIs such as patient volume, average reimbursement per patient, and overhead costs as a percentage of revenue. This visual tool helps you quickly assess performance against your goals.

Regularly reviewing these financial reports allows healthcare providers to make informed decisions, identify areas for improvement, and ensure the long-term financial sustainability of their practices. Consider working with a financial consultant or accountant to help interpret these reports and develop strategies for financial optimisation.

 

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