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WE ARE ACCOUNTANTS FOR OSTEOPATHS
Cash flow, the lifeblood of any business, often poses a challenge for small-to-medium clinics in the UK. Delayed insurance payments, high operational costs, and fluctuating patient demand can quickly destabilise finances.
If you’re an osteopath clinic owner striving for financial sustainability, this blog offers actionable strategies to help you optimise your cash flow without compromising the quality of your services.
WHY CASH FLOW MANAGEMENT IS CRITICAL
Cash flow represents the movement of money in and out of your business. It’s not just about having funds but having them at the right time to meet obligations like payroll, rent, and supply costs.
Benefits of Optimised Cash Flow
Financial Stability: Meet operational expenses without delays.
Growth Opportunities: Invest in new technologies, training, or marketing.
Stress Reduction: Avoid financial bottlenecks and focus on patient care.
TOP STRATEGIES FOR MANAGING CASH FLOW
1. Streamline Invoicing and Payments
One of the most common cash flow blockers is delayed payments. Here’s how to tackle it:
Implement Automated Billing: Use systems like Xero or QuickBooks to automate invoicing and track payments.
Offer Flexible Payment Options: Accept card payments, online transfers, or direct debits.
Enforce Clear Payment Policies: Include payment terms in patient agreements, such as a 30-day deadline.
Send Friendly Reminders: Automate email or SMS reminders for overdue payments.
Example:
You're struggling to keep track of who’s paid for their treatment and who still needs chasing up. The time it takes is frustrating you as its pulling you away from your service itself. An automated invoicing system will make things a lot easier. It’ll give you more time to focus on the personal care your clients need.
2. Forecast Cash Flow Regularly
Cash flow forecasting helps anticipate financial gaps before they occur. Use historical data to predict income and expenses and plan accordingly.
Monitor Trends: Identify seasonal patterns in patient bookings.
Plan for Slow Periods: Set aside a reserve to cover quieter months.
Scenario Analysis: Prepare for best, worst, and average-case scenarios.
Pro Tip: Use forecasting tools integrated with accounting software to simplify the process.
3. Reduce Operating Costs Without Cutting Quality
High operational costs can strain cash flow. However, smart cost-saving measures can preserve care quality while improving financial stability.
Conduct Expense Audits: Regularly review supplier contracts and negotiate better deals.
Invest in Energy Efficiency: Switch to LED lighting or energy-efficient appliances to cut utility bills.
Digitise Records: Reduce storage and admin costs by going paperless.
Example:
Its been some time since you sourced your materials and chose suppliers. You decide to conduct an expense audit and notice that you are sourcing materials from competitors. By consolidating supplier contracts you are able to negotiate far better deals for your practice.
4. Manage Patient No-Shows and Cancellations
Missed appointments can significantly impact revenue. Address this issue by:
Enforcing Cancellation Policies: Charge a nominal fee for late cancellations or no-shows.
Using Appointment Reminders: Send SMS or email reminders 24-48 hours in advance.
Offering Online Scheduling: Make it easy for patients to book or reschedule appointments.
Example:
You find dealing with last-minute cancellations or no-shows really frustrating. By using an online booking platform with automated reminders, you notice a significant decrease in patient no-shows. Plus, it helps your patients too - they’re less likely to forget and more likely to show up for the treatment they need.
5. Diversify Revenue Streams
Relying solely on treatment fees can be risky. Diversify your income by exploring additional revenue opportunities.
Offer Value-Added Services: Introduce massage therapy, wellness workshops, or ergonomic assessments.
Sell Products: Stock items like rehab equipment, orthopaedic pillows, or supplements.
Collaborate with Corporate Clients: Provide workplace injury prevention programs.
Example:
Your treatments are very well aligned with the wellness principle of treating the whole body. This provides you with an excellent opportunity to combine workplace injury prevention workshops with corporate wellness packages.
6. Invest in Technology for Efficiency
Modern software can streamline operations, reduce costs, and improve patient care.
Electronic Health Records (EHR): Save admin time and reduce errors.
Telehealth Platforms: Expand your reach to patients who prefer virtual consultations.
Automated Scheduling: Optimise staff availability with data-driven tools.
Example:
You are overwhelmed by admin tasks and you've noticed some errors creeping into your patient records. You take the plunge and introduce an Electronic Health Record system. Once up and running you find it saves admin time and the accuracy of your record keeping is back on track.
7. Leverage Tax Planning Opportunities
Proper tax planning can save thousands annually. Work with a specialist accountant to identify deductions and credits.
Claim Allowable Expenses: Deduct equipment, training, and travel costs.
Utilise Capital Allowances: Write off the cost of big-ticket purchases like therapy beds.
Explore R&D Tax Credits: If you’re innovating in treatment methods, you may qualify.
Example:
Your practice staff could benefit from extra training, but it's tough to prioritise with a tight budget. Understanding how much you could save by claiming allowances on training, could make all the difference when you are choosing which training programme to invest in.
CASE STUDY: DR EMMA'S FINANCIAL TURNAROUND
Background:
'Dr. Emma', an osteopath with a 10-year-old clinic, struggled with irregular cash flow and rising costs.
Challenges:
Frequent patient no-shows.
High utility bills and admin costs.
Reliance on NHS referrals for revenue.
Solutions Implemented:
Introduced a cancellation policy with automated reminders.
Conducted an expense audit and switched to energy-efficient appliances.
Diversified revenue streams by offering ergonomic assessments to corporate clients.
Results:
Within a year, Dr. Emma reduced operational costs and increased revenue by significantly.
FINAL THOUGHTS
Effective cash flow management isn’t about cutting corners - it’s about making smarter decisions. By implementing these strategies, you can:
Ensure financial stability.
Create growth opportunities.
Focus on delivering exceptional care to your patients.
Remember, small changes can lead to big improvements over time. For tailored advice, consider partnering with an accountant who specialises in osteopathy practices. With the right strategies and support, your clinic can achieve financial resilience and long-term success.
(c) Warren Davies, December 2024
For more tailored advice, reach out via the button below. See your osteopathy practice reach its full potential.
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