A large practice with10 providers feels like they are doing ok financially. After every business meeting, however, the partners leave with more financial questions than answers. They are presented numerous spreadsheets with data about their practice but do not understand the finances. Also, they do not have a sense of how they are doing compared to similar medical practices in their region. These spreadsheets that they review in the meetings have never been explained in a way that is understood by the partners and no benchmarking is ever done. The accounting firm has not made a known mistake, but there is a clear disconnect between the practice and the accounting firm. The partners find that it is difficult to communicate with the accountants and they do not feel they are given comprehensive answers.
Diagnosis:
Accounting confusion
Recommendations:
- Expect your accounting firm to be responsive and make changes if they are not
- Choose accountants who always relay financial information in a way that is understandable
- Make sure your accounting firm does benchmarking to ensure your practice is performing as it should
- Do a yearly review of all your practice’s business relationships—including the accounting firm—to assess the value each is adding
- Review our articles on Financial Benchmarking and Choosing an Accountant
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Case Study: What's Up With All These Spreadsheets? | SBGM