By Nick Hernandez
It is once again the time of year when medical practices should be working to finalize their operating budget for the next calendar year. Unfortunately, too few practices actually take the time to create a meaningful budget, instead seeing the endeavor as a complex, time-consuming process that likely will not be used. Creating and following a budget involves self-discipline and sacrifice, but will help you develop wise spending habits to better manage your practice’s finances now and into the future.
If you’re continually seeing failure at budgeting, the best place to look is usually at the fundamentals. It only takes a fundamental misstep or two to transform a well-planned and well-formed budget into a complete disaster. Budgets should be realistic, flexible, and consistent with practice goals and objectives.
Here are three keys to consider that will point you on the right track toward success as you build your budget:
1. Know why you are budgeting. If you’re developing a budget just because someone says it’s a good idea, it probably won’t help very much. Similarly, if you’re just following the steps in a practice finance workbook because it suggests this is a great way to move towards financial success, budgeting won’t help much at all. The reason for budgeting is to help you spend less than you earn. It shows you where your spending weaknesses are and provides the structure for you to get stronger in those areas. If you’re in the dark about how much your practice spends and where you spend it, changing habits will be difficult. And even if you’re financially comfortable, a budget can help you identify unnecessary expenditures and deduce ways to redirect funds towards your priorities. [Read more…]