Most practitioners (and their staff) long for personal and professional financial security. Funnily enough, this means different things to different people.
Some folks want a ton of money sitting in the bank “in case of emergency,” sometimes as much as $200,000 in cash. For others, having a week or two of coverage of the bills in case they are off sick is all they can manage or feel is necessary.
For a practice, it is important that more income is made and banked than is going out the door, and that the surplus is kept in a Reserve Account and another amount is set aside for equipment (etc.) needs that will be required in the future (this takes a little planning as to how much to set aside weekly or monthly).
In doing weekly or monthly financial planning and paying bills, one would need to look at where to spend money that will generate more income. For instance, skipping promotional actions to save money will cause the practice to shrink instead of growing. A certain percentage could be allocated each week towards promotion. A certain percentage could be set that is for payroll and bonuses. A small percentage should be setaside for the Reserve Account. And so on.
By properly planning expenditures instead of just paying bills and blowing what’s left over (if any), you will gradually reach a position of financial security. Most practitioners (and their staff) long for personal and professional financial security. Funnily enough, this means different things to different people.
Some folks want a ton of money sitting in the bank “in case of emergency,” sometimes as much as $200,000 in cash. For others, having a week or two of coverage of the bills in case they are off sick is all they can manage or feel is necessary.
For a practice, it is important that more income is made and banked than is going out the door, and that the surplus is kept in a Reserve Account and another amount is set aside for equipment (etc.) needs that will be required in the future (this takes a little planning as to how much to set aside weekly or monthly).
In doing weekly or monthly financial planning and paying bills, one would need to look at where to spend money that will generate more income. For instance, skipping promotional actions to save money will cause the practice to shrink instead of growing. A certain percentage could be allocated each week towards promotion. A certain percentage could be set that is for payroll and bonuses. A small percentage should be setaside for the Reserve Account. And so on.
By properly planning expenditures instead of just paying bills and blowing what’s left over (if any), you will gradually reach a position of financial security.
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