Physical therapy is a very rewarding field. You help people heal, come back from injury, gain strength, and eliminate pain. After a physically demanding day helping your clients, dedicating several more hours to record keeping is probably not something you enjoy. Even so, owning your own (successful) physical therapy business absolutely requires meticulous bookkeeping.
The accounting system you use will depend on whether you own your own business or if you are part owner in a franchise. Franchises centralize their accounting and you are responsible for a small portion of the duties. If your business is its own entity, you will be responsible for navigating the complicated world of medical billing. Today, we present to you: ten tips for accurate physical therapy accounting.
1) Stay on top of accounts receivable: The reality of physical therapy is that you are working today to get paid months from now. You wait for the insurance payment and then bill the client for the balance (if applicable). Keep the invoices that are awaiting insurance payments in dated files. Follow up on denied claims immediately with the company and the client. Send client payment reminders after 30 days.
2) Balance profit and loss: You know what months are slower than others. Sports injuries will follow the fall, winter, and spring sports schedules. May, July, and August tend to be busy while September, November, and December are slower times of the year. Your loss column during the slow months needs to balance with profits. Don’t order as many supplies and cut back on employee hours.
3) Submit insurance claims on time: Waiting to submit insurance claims can kill your business. A patient may change insurance providers and you could end up filing with the wrong company. This creates a headache for you and your client. Submit your claims immediately.
4) Automate invoicing: Most physical therapy treatment courses require visits two to three times per week. Does your customer want to be handed an invoice every time they walk out the door? After a month of visits they’d have a huge stack to file. Make it easy on yourself and your client by providing emailed invoices and automatic billing.
5) Set reminders for follow-ups: Insurance companies require that patients show improvement or they won’t continue to cover treatment. They require six-week progress reports. Miss filing the report and you’ll miss getting your reimbursement.
6) Go with cloud accounting: The advantages of cloud accounting are huge. If your office has multiple locations you can get them all on the same system. If you offer in-home physical therapy you can invoice and record on site. You aren’t tied to any one computer or server. You can access your account anywhere and anytime.
7) Don’t overwhelm your receptionists with bookkeeping: Receptionists are the point of entry for your business and a chaotic reception can turn off potential clients. Keep your front desk running smoothly and your bookkeeping and accounting in the back office. If you don’t have the capacity for in-house accountants, outsource to a firm.
8) Create a savings account: Designate a portion of your profits for savings each month and keep those funds in a dedicated account. Reserve it for large equipment purchases or expansion. This may help you avoid having to take out a business loan with interest.
9) Pay employees with direct deposit: Writing or printing checks is a waste of your time. Automate your payroll with QuickBooks and have funds direct deposited to their bank accounts.
10) Know your tax obligations: You are required to pay quarterly taxes that are reflective of your business income bracket less expenses. Learn what expenses are deductible and keep your personal expenses out of the business.
Working with a financial solutions firm can take all of the day-to-day accounting tasks off your plate. While we aren’t tax preparers at JADDE, we are QuickBooks cloud accounting experts. If you need a mobile accounting firm that can keep your physical therapy business’s financials accurate without needing a desk in your office, JADDE Financial Solutions is right for you.