How well is your chiropractic practice doing? Do you have all the up-to-date financial information at your fingertips to answer that question fully and accurately? If not, it could well be the case that your financial reporting and management systems aren’t working for you as well as they should. Poor accounting practice doesn’t just mean problems at tax time, it can also mean you just don’t have the information you need to optimise your practice’s sustainability. We can help! Here are ten top tips to help you get your accounting back on track, potentially saving you money as well as bringing a host of other benefits.
1. Make sure you know what your profit and loss figures look like. This means incorporating accounts payable, bills from creditors, receipts and similar in order to get an accurate snapshot of your current financial situation.
2. Use proper accounting software: you just aren’t going to be able to capture all the information you need to manage your accounts successfully on a simple spreadsheet or similar generic software package.
3. Employ a bookkeeper – outsource if necessary! Professional bookkeepers not only know what they’re doing, they’re also fast. If you’re wasting hours of your time managing the books, those are hours that you’re not practising, therefore you’re losing money. A bookkeeper frees you up to concentrate on what you do best.
4. Don’t rely on your bank balance when making financial decisions: balances can be misleading; use your profit and loss statement to determine how well the business is performing.
5. Are you sticking to the plan? A well thought out business plan should set out your vision for your practice and be the guiding statement of intent for macro expenditure. If you’re not sticking to your plan (or worse still, don’t have one), developing a suitable strategic overview for how you intend the company to develop over the next few years is essential.
6. Don’t mix personal and business income or expenses. Common sense, but still a surprisingly frequent error; it’s important to have a business bank account and ensure that all relevant bills are paid from it and payments paid into it.
7. Make time to listen to your financial team. Whether it’s a meeting once a month with your accountant or touching base with your bookkeeper every week or so, taking time to find out what’s happening to practice finances is a good opportunity to spot worrying trends or take proactive measures before a financial disaster occurs!
8. Don’t leave everything until tax time. Particularly when you first start out, it can be tempting to put the development of high-calibre financial systems on the back burner. Don’t! Poor systems increase the risk of errors and missing information. Nobody wants to be frantically unpicking financial irregularities with days to go before a tax deadline. Start now to avoid last-minute panics!
9. Sort out appropriate storage for your invoices, receipts and other financial documents, as the information needs to be kept for at least five years for tax purposes. Electronic copies are now accepted by the tax office: using accounting software that has a facility for uploading and storing relevant documents (or better still, facilitating electronic invoicing etc) is the easiest way of achieving this.
10. Use your financial data! Financial data isn’t just there to calculate tax, it’s a vital tool in the planning process for your practice. Familiarising yourself with the financial profile of your business enables you to make the decisions your business needs to thrive.
Complete our software comparison tool to find out which accounting software is going to give your practice the high-grade financial information needed for sustainable success.