It seems implausible, inexplicable; how can an employee of a small business get away with stealing a whole lot of money? It’s actually a sign or symbol that doctors and other entrepreneurs do not put the time into the financial detail so vital to their future and their freedom.
If you’ve been following my business and financial articles; then you know your multi-million-dollar retirement is based on good economic stewardship when the amounts are small. Optimizing profits and successfully allocating them into your financial machine can make anyone wealthy or affluent even in modest-wage jobs. Ie: doctors should be rich.
The clinic heist of the century! In one case, the doctor paid so little attention to economic detail that his front desk assistant, who was a relative, skimmed off of the top for over 10 years. Eventually, after a complaint to his accountant about how high his taxes were compared to what he had in the bank; the accountant determined that someone had to be stealing. FYI – she remained working in the office.
After putting in the right financial measures along with strong checks and balances, I have had 100s of doctors tell me they found theft. Yet, other than the million-dollar heist scenario, your biggest loss is not the theft, but what happens when you’re not tightly managing your money.
The purpose of small business ownership is to make the world a better place. The goal is to create freedom. This comes through getting closer and closer and closer to the point where you no longer need the money, can just work because you love the work, and have the power to determine how often you need to be in the office.
Here are a 3 important tips.
- Create a daily financial report. You should actually go into a shift with knowledge of what is to be collected for the day and confirm via end of day reporting.
- Weekly financial meeting with financial CA.
- Cash collections should be in line with your collection per visit average
- Billing should be on track with billing goals and expectations
- If utilizing insurance; the percent of billing collected and aging report must equal the standards you’ve set for each.
- Profit analysis for any individual department and as a whole
- You’re the CEO. Here’s your minimum CEO financial analysis reviews:
- Current bank statement.
- Cash in the bank.
- P&L statement by area or department
- Overall cash-flow statement
- Billings against collections.
You should go into this analysis with very specific expectations. Those that don’t can’t possibly realize whether the numbers and metrics above are standard, improving, or going backwards.
HERE’S THE BIG POINT: SOMETHING IS ALWAYS WRONG
98% of air travel is course correction. Without constantly re-checking navigation; a flight going from Florida to California would end up in Maine. Every business faces the need for some level of financial course correction weekly in order to keep profits on course. Something almost always goes off track each week and if not corrected as close to the point it occurred as possible; it will really add up in the long run.
Significant employee theft is mathematically unlikely, but robbing from yourself through poor financial management is incredibly common. If you do not have a method for evaluating and maximizing finances weekly; you’re more certain of losing a million dollars than if you hired a bank robber for a front desk manager.
Need help? Investing in someone to help you manage your practice or business profits now brings million in financial health and prevents the economic cancers of tomorrow.
Have fun saving the world
Dr. Ben
