Managing cash flow has become significantly harder for doctors over the past few years. Insurance companies are no longer footing the majority of the bill for common services. This responsibility now belongs to patients, who aren’t always known to pay in a timely manner. Then there’s the need for new technology, in regards to both management systems and medical equipment. Complications with cash flow require the utmost organization, and failing to implement new tools could leave you with over one hundred missed payments.
These changes wouldn’t be so intimidating if the financial cycle of medical practices wasn’t already complex enough. Doctors have multiple slow and busy seasons. For many practices, small business loans were the only way to offset late payments from insurance providers, which usually pay quicker than patients.
Here are four ways doctors can stabilize cash flow during rocky times:
1. Monitor Finances
Most medical experts are not business experts. They are too busy serving patients and studying medical journals to keep track of their finances or consider how to improve them. But failing to do so is like neglecting regular medical checkups. Doctors are constantly treating patients who don’t go in for regular check ups until they experience some sort of health problem. Waiting until symptoms arise decreases the likelihood of a simple solution. Had the problem been detected early on, the damage would have been easier to mitigate.
The same concept applies to tracking finances. Ever wonder why so many businesses stress the importance of data? It’s because, when you can go back to your records and see what your finances looked like not too long ago, you can clearly determine what you are doing right and what you are doing wrong. It sounds crazy but without this awareness, the average doctor would likely have no idea as to how much their net worth or cash flow has changed. He or she would also be less likely to be approved for a substantial small business loan, and you never know when that essential piece of equipment will decide to stop working.
2. Only Order The Inventory You Need
Doctors have a tendency to accumulate a massive surplus of supplies. They might buy several seasons’ worth of inventory solely because they don’t want to worry about inventory anymore. But this often leads to unnecessarily high bills. You can avoid this by only buying the supplies you know you will need for this current season. Doctors typically have a good idea as to how many appointments will be made for an upcoming busy period. But they might not have the money for a big inventory order right before this period begins. United Capital Source can help you solve this dilemma with the numerous working capital loans we offer for all kinds of medical practices.
A merchant cash advance, for example, can be approved even if your finances aren’t in top shape. You could then order inventory and pay off the debt with each visit, since most of your patients pay with debit or credit cards. Yes, cancellations happen all the time but with a merchant cash advance, earning a little less than you expected one month has no bearing on your next payment or how quickly you must pay off the debt in full.
3. Consider Long-Term Advantages
Busy schedules cause doctors to view expenses purely as direct costs, rather than investments. They don’t look into the long-term benefits of spending more money than their current finances will allow. A more advanced piece of equipment might last five years, whereas the basic model will probably last two or three. We understand why a doctor would balk at the idea of using a small business loan to pay for equipment. It’s not like the equipment is going to radically increase revenue. But at United Capital Source, we understand that expensive pieces of equipment are needed to keep operations going.
What you might have overlooked, however, is how buying (not leasing) advanced equipment will affect your other expenses or monthly bills. We may be able to develop terms that reserve your largest payments for when you begin to spend less money even though more appointments are being scheduled.
4. Get A Good Deal On Property
Another common financial mistake for doctors is overpaying for the location of their offices. Doctor’s offices are generally located in high-rent areas. The desire for an optimal location and upscale appearance can make you forget about getting a decent deal. Sometimes, the best way for a doctor to minimize expenses is to find a more cost-effective space. United Capital Source specializes in new locations for two reasons: One, we can approve and distribute funding when it makes the most sense for your financial cycle, or simply when you will lose the least amount of revenue. The second reason is that with our incomparably flexible terms, you won’t necessarily have to make fixed, monthly payments immediately after your new office opens for business.
Our Financial “Health” Plan
If you’ve never thought about working with a business lender until now, you are not alone. Thanks to the new medical billing landscape, plenty of doctors now have no choice but to explore small business loans for the very first time. Do not be intimidated by all the things you have to do to fix your cash flow because we will lend a hand with every single one of them, whether it’s through funding or levelheaded advice. Our “health” plan covers reconstructive operations as well as regular financial “check-ups.” And yes, we will show you the same honesty and compassion that you show your patients.