A new year presents a fresh opportunity to take stock of the financial condition of your medical business. Given the demands on your time and evolving healthcare regulations, it is understandable if you have some catching up to do. Before you can lay the foundation for success in the year ahead, consider the following questions:
- How much do you know about your 2018 key performance indicators (KPI)?
- Do you have accurate year-end financials?
- Do you fully understand what your tax liability will be?
- Do you have your 2019-2020 strategic goals locked in place?
- Do you have the budget to accomplish the plan?
By looking back you can gain a good sense of what tactical steps you need to take to move forward. Too often, middle market healthcare practice owners are startled about their tax liabilities come March. For example, if you have plans to grow by acquiring or opening additional practices, these liabilities can drain your cash flow, making it difficult to run your current operation. It’s not too late to make adjustments and put a budget in place complete with cash flow projections and with interim checkups.
Along with the immediate needs of your business, you will also have to account for changes in the healthcare industry, and how they factor into your planning process.
“The healthcare sector’s need to reduce costs, improve quality and increase access is exerting pressure for major structural changes, including a new business model.” (IBISWorld)
Accounting Today conducted a 2018 analysis of the healthcare sector with a look ahead to 2019. The report identified challenges the healthcare sector is facing, such as:
- Rapid changes in technology that affect medical treatments, recordkeeping and practice management—all calling for significant capital
- Uncertainty about the insurance industry, specifically regarding changes in the Affordable Care Act
- Changes in models for healthcare delivery, specifically the shift to a value-based system
It can be a delicate balancing act to keep up with the latest business models and changing compliance demands while running your business. CPA and business advisory professionals with dedicated healthcare consulting expertise can work with your business to examine your KPIs, cash flow, tax obligations and business objectives.
Whether your business is experiencing exponential growth and needs an operational analysis and tax and compliance work, or it struggles to grow and needs a business strategy with tactical planning, you want to work with professionals who emphasize trust, clarity, communication and value in working with closely held healthcare companies. You also want to count on the availability of fractional CFO executives who can step in during a crisis or to help your business through a succession plan by filling critical gaps.
You should never be surprised when tax time comes around. Make the most of the new year by examining your business’ past performance. By doing so, you will be better positioned to adjust to the new healthcare models with a firm hold on your budget and in alignment with your growth objectives.
Daszkal Bolton, a South Florida CPA and business advisory firm, provides accounting and tax, audit and consulting services to closely held middle market healthcare companies. Our CPA and healthcare consulting services include operational analysis, strategy exploration, fractional executive and business valuation (buy/sell agreements and wealth management).
Questions about this article or our Healthcare Industry Services? Contact Kevin E. Reynolds, CPA, Partner, Healthcare Industry Leader, or David Light, PT, MBA, Senior Manager, Healthcare Advisory Services, at 561-886-5246.