Steer your cash to keep it flowing

Practice Management. By Julie A. Jacob, AMNews staff. Sept. 23/30, 2002.

As any physician who has waited for claims to be reimbursed knows, the hardest part of managing a practice's money may seem to be getting the check. But how revenue is organized and handled once that check arrives is also an important part of running a practice smoothly.

Developing an efficient system for allocating practice revenue can make the difference between a practice that has the money it needs for unexpected expenses and capital improvements, and one that always seems to be scrambling for funds. It can also make a big difference in how much you pay in bank fees.

A physician's practice should put money for its regular expenses into a no-fee business checking account, said Hobie Collins, a principal with Medical Group Management Assn.

"It's important to shop around," Collins said. Compare the fees and deals offered at various banks and credit unions before choosing one for the group's business.

It's also a good idea to have one checking account for expenses that occur weekly or monthly -- such as payroll, utilities and supplies -- and another account for expenses that occur less often, such as liability insurance premiums and membership dues, said Keith Borglum, vice president of Professional Management and Marketing, a physician practice management consulting firm in Santa Rosa, Calif.

When funds earmarked for both recurring expenses and less frequent expenses are lumped together in the same checking account, thousands of dollars needed for those yearly or twice-yearly expenses can build up, giving the illusion that the practice has more money available for physician compensation than it really does, Borglum said. [...]