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5 Ways Healthcare Facilities Can Improve Their Financial Performance

StrategyDriven Business Performance Assessment Program ArticleHealthcare facility operating margins are under pressure from all sides. Uncompensated care of patients, slow paying insurance providers, reduced government reimbursement rates and rising costs are all contributing factors. Cutting staff and similar solutions risk quality of care and an extended wait time. Here are four ways healthcare facilities can improve their financial performance without adversely impacting patients.

Measure and Manage Based on the Right Metrics

The metrics you use as the yardstick for organizational performance affect how people act. Instead of seeking to get patients out as soon as possible, look at readmission rates. It would be better to invest a little more time and effort up front so that patients don’t have to come back later. This is so important that low re-admissions are necessary to join an accountable care organization or ACO. Instead of simply measuring the time it takes to discharge a patient, focus on finding the most efficient and error-free method of doing so. You want to ensure that acute patients receive appropriate self-care instructions and follow-ups so they don’t end up getting worse. You can also use data to identify opportunities for improvement, whether it is determining where to streamline operations or which profit-centers you may want to expand.

Work with Payors, Not Against Them

Healthcare facilities have no control over underpayments from government health programs. They can work with commercial and employer-based payers such as insurance carriers, and they can work with private pay patients. Healthcare facilities should take the time to understand their existing contracts and look for ways to better meet those contracts, so that they receive as much money back as possible. A common solution is renegotiating contracts.

A surprising number of uninsured patients are eligible for government programs. Work with them to sign them up for programs so that the facility can reduce its rate of uncompensated care or bad debt from those who cannot afford expensive ER and OR bills.

Reevaluate Your Suppliers

Work with your vendors to save money on supplies; that is the second largest expense in most healthcare facilities. Ask vendors about discounts you could receive simply due to the volume of items you already consume. Inquire about discounts if you ordered items in bulk and run inventory so that you don’t order items you don’t need.

Collect Data to Manage Labor Costs

In medical facilities, labor costs and labor-related costs may be more than half of all expenditures. Focusing on other areas is a waste of time if these expenses are not under control. The solution is to carefully track data on staffing and manage labor on a cost-per-patient-day level. Don’t over-staff one area and under-staff another. Make data-driven labor decisions whether hiring, firing, or assigning overtime. Hold regular meetings on managing labor rolls monthly, quarterly and annually. Don’t cut 10% across the board, but instead cut those individuals who are redundant or under-utilized. If labor costs are high in an area, you can look for third-party service providers who you could outsource the work to.

Use risk reporting software to find gaps in dynamic care, study financial trends, and determine the risks you may face based on resource allocation decisions. Then you won’t end up hurting patients with understaffing during a predictable peak demand or fall short of cash unexpectedly.

Industry surveys have found that finances are the number one concern of executives year after year. Following these tips can help you cut costs and improve revenue without hurting the quality of care patients receive.

How to Avoid a Business Bankruptcy

StrategyDriven Entrepreneurship ArticleThe number of small businesses filing for bankruptcy increases every year, and while bankruptcies don’t always lead to the full closure of the company, in a lot of cases they do. If your dream business is currently on the verge of bankruptcy, don’t panic. There are some steps you can take that may help you to turn things around. Try to think as positively as you can and put the following steps into action.

1. Look at the Figures

The first thing you need to do is work out how much you need to make each month to survive. This includes both the money you need to actually live, and the money you need to repay your creditors. Add 20% to this figure to give yourself a cushion. Finally, add in the costs of running your business. This includes everything from your bills to your payroll to the cost of inventory. With this information at hand, you need to work out how much your business is earning each month. If you are facing bankruptcy, it’s likely you have a deficit between the two numbers. The next steps are going to focus on decreasing costs and increasing profit to give you enough to cover everything you need to pay.

2. Cut Costs

Okay this sounds simple, but there is sure to be some ways that you can lower your expenses to meet your spending goals. Consider getting rid of your traditional phone plan and switching to VoIP, look into cheaper packaging options, and look into obtaining new quotes for any services you receive that aren’t under contract. The aim here is to look for redundant costs that your business can do without and either eliminate them entirely or reduce the amount you are spending.

3. Renegotiate with Your Creditors

Phone your creditors and let them know you are considering bankruptcy. The majority will be happy to come up with a payment plan that works for you so long as it means they will still receive what they are owed (with bankruptcy there is no guarantee they will be paid). Some may be willing to waive the interest, while others will extend the terms of your debt so that you have longer to repay it. You could also file a consumer proposal with your creditors if you don’t want to speak to them directly.

4. Look at Short Term Cashflow Options

We’re not necessarily suggesting that you take out loans to cover your cash flow. Instead, speak to your vendors and ask them for more lenient payment terms. If they can extend their terms, you will free up more cash in the short term. Another option is to ask your clients to pay you quicker. You could offer them a small percentage off their invoice if they are willing to pay faster. Both of these options will provide a boost in the short term.

Sometimes filing for bankruptcy is the only option. However, it is worth giving the above a try first if it could mean saving your business.

Safeguarding Your Business Profits

StrategyDriven Entrepreneurship ArticleAfter all the work and investment that goes into building a successful business, the day you start to realize a decent profit makes you feel on top of the world! The primary objective in running a business is to make money from it – even if that’s not the most important aspect to you personally and you love the challenge and the nature of the work first and foremost, you still need to make a profit to stay in business. Having gotten to the stage where the books are in the black and the profits are starting to roll in, how do you make sure that your hard-earned cash is put to best use?

The urge to splurge

Unless you have a superhuman level of self-control, you’ll probably want to buy yourself and your loved ones a few treats. A special night out or a weekend away, new clothes or hobby equipment, or maybe a luxury purchase for your home are all likely ways that you’ll want to give yourself something back from your business. There’s nothing wrong with that idea, after all, you should be able to enjoy the fruits of your labors. However, there are several considerations you need to make before getting too carried away with your spending spree.

Where is the money coming from?

You obviously know how the profit has been generated, but you need to consider how your business is set up and how you are paid out of the profits. For instance, do you get a salary and a percentage of profits, or dividends? You should discuss the structure of your business with your accountant to make sure it is positioning you in the most advantageous place regarding tax and debt liabilities. If you would have to take responsibility for the costs of the business taking a downturn and be liable for its debts, you need to take account of this, and make sure you are covered for such an eventuality.

Where is the money going to?

Whenever you pay out for anything, it’s worth checking whether your purchase could be legitimately set against your tax return as an expense. That doesn’t mean trying to pass off personal purchases that have nothing to do with your business, but you might be better off leasing a car through your company than buying one privately for example. It’s always worth checking how to gain the best advantage, as long as you stay within the law – if there’s one agency renowned for its tenacity, it’s the IRS!

Clearing debts

When you start to make a profit, your first step before deciding how to spend the money you’re making is to clear any debt that may be outstanding. Depending on how you have structured your finances, your business may be showing a profit on paper, but still be liable for repayments to investors for instance. If this is structured as a repayment plan over a defined period of time, you can still take any surplus profits for your personal use. Or your cash flow may require you to have a reserve fund to cover any shortfall caused by slow-paying customers or other short-term drains on resources. Once your business liabilities are confirmed, look at your personal finances. If you have loans, credit card debts, or lease and rental agreements, make paying these off a priority. It will save you money, in the long run, to focus on clearing debt and avoid paying interest on what’s due. You probably want to make an exception for your mortgage, which is more of a high-value long-term investment; unless your profits are so impressive you can afford to clear it now!

Putting money back into the company

Many business owners choose to reinvest their profits back into the business, and this should be your next consideration. If you want to expand or improve your operations, then reinvesting some of your profits is a sound way to grow your business. The money you reinvest needs to be detailed precisely on your accounts to ensure your tax liabilities are accurate, or you will lose out; so don’t splash out on new tablets for all your staff without the expense being recorded and legitimized.

Investing

Once you’ve checked whether you need a reserve fund, cleared any outstanding debts, and decided how much to reinvest in your business, you can then relax and start choosing how to spend your money. Treating yourself is important, as it will give you a thrill to know that you are splashing out on something you truly desire as a result of your hard work and business acuity. However, if you want your money to work for you, you should consider investments. There is an extensive choice of different types of investment available, from high-risk shares to low-risk long-term assets, property investment, bonds, foreign exchange, cryptocurrencies, and many more. The most reliable returns will be in low-risk stocks, but these can take many years to achieve their full potential. High-risk strategies by definition increase the odds that you could lose your money, but you could try a middle road with swing trading strategies. These are specially selected shares that experts calculate are just about to make a significant swing to profitability, which could gain you better returns over a shorter time frame.

The complexity and intricacies of the financial world need experts to exploit them to their full advantage, and if you try and go it alone without seeking their advice, you’ll lose a lot of time on research, and you could well make the wrong choices. A financial adviser can guide you through your investments and make recommendations to suit your needs and aversion to risk, which is preferable to trying to learn enough to make sound decisions by yourself. Most importantly, your CPA should be more than just a number cruncher. They should be able to advise you as to the most efficient way to structure your business and how to get the best from your financial arrangements.

How to Simplify Your Business’s Finances

StrategyDriven Entrepreneurship ArticleIt might sometimes feel as if your business needs to choose between keeping its customers happy or enjoying healthier finances. If you feel forced to pick between the two, your business might never be able to reach its potential, which is why you must find ways to lower your expenditure without compromising on consumer satisfaction.

A few new tactics and tools could provide the solution you have been looking for, so keep reading to find out how to simplify your business’s finances.

Set Financial Goals to Increase Your Revenue

If you want to enjoy a greater annual revenue, you must set financial goals. Doing so will provide both you and your team with targets to hit each day, week or month, which will help to keep your business firmly in the black.

If you fail to meet a target, you can then identify the tweaks and changes you will need to make to your processes. It will help you to stay focused on your income and outgoings, so your business never takes a step backward.

Open a Separate Business Account

Never confuse your personal and business finances again by opening a company bank account. Many banks are happy to provide entrepreneurs with a specific account for a business. It will make it easier to separate your personal and professional income, which will make it much more straightforward to organize your taxes, pay your business expenses, and monitor your revenue.

Dedicate One Day a Month to Reviewing Your Finances

It doesn’t matter if you have the best accounting software or accountant, you must take the time to review your finances. Every business owner must have a firm grip on their income and expenditure, which can prevent costs from spiraling out of control.

A monthly financial review is a must, so set one day aside to review your statements, invoices, and bills. You also should use this day to negotiate with vendors, change suppliers, and find ways to reduce your outgoings.

Setup Payment Reminders and Alerts

With so many tasks to complete and projects to manage, it can be easy to forget to pay an important bill. However, you will soon realize your mistake when your electricity isn’t working, or your water has been switched off.

Never miss an important payment again by setting up an alert in a Google calendar. You will then receive a notification to pay a bill to help keep track of your finances.

Streamline Your Amazon Listings

Do you sell products through Amazon? If so, you can increase both your presence and selling power with Amazon market integration software. It allows you to manage both domestic and international accounts, so you can easily fulfill your customers’ orders to their exact specifications. You can also manage both your availability and pricing to maximize your cash flow. Visit sellercloud.com to learn more about the powerful platform that can increase your finances.

Go Paperless

Companies can often be guilty of holding onto unnecessary paperwork. By doing so, they can over complicate their filing systems. Organize your finances by keeping only the documents and statements you need and then shred the rest. You also should keep transactions and contracts in the cloud if possible and go paperless so that you can access them at any point and on any device.

Money Management Tips Every Business Should Consider

StrategyDriven Budget Management ArticleRunning a business is something that takes grit and resilience. This is because you’re likely to face many hiccups along the way as well as challenges as most businesses do. However, if you make a conscious effort to ensure you’re continuously learning, taking in new information, and keeping up with industry trends, you should find that your business continues to grow. Of the many key aspects of your business, finances are one of the most important. In light of this, you should continuously look for ways to ensure that your business finances are well managed. On that note, you’re going to find some key money management tips every business should consider below.

Look for Discounts

Bargaining and looking for discounts is something that can be done, even when running a business. For this reason, when looking for ways to manage money and resources in your business, you should consider where you can get reasonable discounts. You could, for instance, speak to your vendors and see if you can get a discount, especially if you’ve been a loyal customer. You can also try checking other areas such as your internet provider, phone bill, and insurance providers as well. The goal should be to save as much as you can as it all adds up at the end of the day.

Keep Track of Expenses

Another way that you can effectively manage money in your business, is to keep track of your expenses. This may seem obvious, but it can become easy to lose track of your expenses and begin spending outside of your budget. Some tips for keeping track of your business expenses include developing a bookkeeping system, setting up a payroll system, and determining your tax obligations. In addition to this, you should also carry out audits on a regular basis and ensure your finance team is effectively carrying out their job. As the saying goes that every penny counts, it’s imperative that you know where your money is going. When tracking expenses, you should also ensure that they are within your overall budget.

Periodically Review Expenditure

After tracking your expenses, the next logical thing to do would be to ensure everything adds up. While doing so, you might notice that there are unnecessary expenses eating out of your budget. You should, therefore, be realistic and see if there happen to be any expenses that can be completely eliminated or reduced. This could mean reducing the amount you spend on buying office snacks or seeing if you can get a cheaper alternative. If you find you’re going through a rough patch, it could also mean reducing the amount you pay yourself some months. To cover unforeseen expenses, you could find a loan with good or bad credit to help you get by that month. The idea should be to get rid of expenses you don’t need so that you free up your money and have more disposable cash to work with.

Save

One of the most important things to do when managing money as a business is save. This is where budgeting comes into play as saving is almost impossible without budgeting. You should begin by looking at your cash flow and determine how much you can actually afford to save. As with any time you’re saving money, you should pay yourself before spending anything. In addition, reducing your expenses as mentioned above means that you have a lot more left over to save and reinvest in other aspects of your business.

Hire a Professional

If you don’t have one already, hiring a CFO or accountant is a good idea if you need help managing your money as a business. They typically have the expertise needed to keep you on track and ensure you meet your financial goals. Seeing as tracking your business expenses can be tedious, they can take on this task and let you know if they identify any areas of concern such as with your cash flow. You could also explore the option of hiring a freelancer or contracting with a local provider instead if you’re trying to cut costs or can’t afford a full-time employee.

Money management tends to have similar fundamentals whether you’re trying to apply it in a business or your personal life. It is, therefore, key that you adopt positive habits when it comes to money and use the many tools and software available to aid the process. Hopefully, after reading the tips above you’ve learned a few more money management tips every business should consider.