I read and analyze hundreds of financial statements every year and surprisingly to me the trend is not changing from year to year and from practice to practice. I hope you can use these easy tips to reduce your overhead and increase your profits! -Dalia
- Merchant Fees – this is one of the most overlooked expenses in a medical practice. As more and more patients utilize credit cards as their method of payment the cost of merchant fees can become surprisingly high. How do know if you are paying too much? Take a look at your monthly merchant statement – simply divide total fees charged by the credit card payments received, which will be listed on your statement. If the fees come out to be over 3.5%, you are paying too much. Merchant vendors are like any other service – there are many options and cost savings opportunities that exist.
- Office/Clerical Supplies – EMR has been in place for almost five years yet your paper and ink costs are just the same if not more? Mostly it has to do with a matter of habit, especially if you have long time employees that just never changed their ways of doing things. It can be as simple of a fix as calling a staff meeting and encouraging all employees to have a “paperless” mentality. Your practice administrator will need to lead by example and continue to remind staff to change their habits but with the right leadership and persistence, you can save thousands of dollars.
Besides paper and ink, there are other office supplies that typically get overbought or magically “disappear” from the office (such as toilet paper). Implement purchase requisition request system where someone needs to request an approval for purchase – its simple to implement and it’s very effective, and the best part of it – it won’t cost you an extra dime.
- General Liability Insurance – this will probably come to you as a shocking fact but many medical practices are paying double insurance on their equipment. How does this happen? If you lease or finance your equipment purchases, every financing institution will add a mandatory insurance premium to your monthly payment. Then you go and submit your general liability insurance application and list your equipment (because they ask you to!) and here you have it…two insurance premiums on one CT Scan… Make sure to cross-reference all your leasing and financing details with your general liability insurance content so you don’t get double charges.
- Telephone and Internet – communication costs continue to increase for every business but there are a couple of things you can keep an eye on to make sure you are not getting ripped off. Look at your latest phone bill and make sure you are using every phone line you are being billed for, have an IT expert look at your internet bill – many times the internet provider will sell you faster internet and higher bandwidth when you really don’t need it. Consider consolidating your mobile and office phones for a better rate.
- Bank Charges – this expense is a low hanging fruit that can be easily reduced – look at what you are spending, speak to your banker and fix it. Don’t be surprised if you are still paying for a CD Rom data delivery charge even though nobody uses it anymore (or no one ever has if you ask me) and some ridiculous “monthly account analysis fee” …I am still not quite sure what they “analyze”. Ask your banker to provide you with a monthly account analysis statement so you can see all the details and hidden fees.
Team up with your practice administrator, your CPA, your insurance agent, and your banker and you will see amazing results with little effort.