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10 important points you need understand about your financial report and why they are important for you.
I was recently discussing with a young doctor the importance of knowing his practice numbers. I was amazed that the doctor had so little knowledge about the basic accounting in his practice. He even asked me why it was important to know these numbers, since his practice was going fine and he had no financial distress that he knew of.
He just sends his check log to his accountant every month and is sent a report, with little or no concern about what was going on. I ask him some basic questions about his goals and his financial situation, and he knew little to nothing about what was happening. In my opinion this is a flaw in leadership that will eventually lead to a financial disaster.
The 10 things you need to ask yourself about your understanding of your practice finances are:
Here are two useful clichés I enjoy, the first is: if you are starting on a trip, you need to know where you are going, so you will know when you arrive, and the second: you improve what you measure.
I hope this young doctor sees the value in this discussion. I firmly believe a knowledge of where you are and where you want to go financially will guide you to more success than being blissfully ignorant of your finances. If you don’t understand these principles and skills, find someone who will help you, and you will become more knowledgeable and more successful.