Its not enough to make more than you spendpractices must also keep a close eye on cash flow.
Managing cash flow is a challenge for all small-business owners. But with proper planning and insight, cash flow crunches can be avoided.
Cash flow planning or forecasting starts with a budget. A surprising number of practices do not work with budgets, perhaps because the idea of creating one can seem overly complex. Yet budgeting does not need to be an extensive process. Existing practices can look at their historical data and use that to make a simple projection of revenue and expenses. Most expenses are known or fixed and therefore easier to project. These include rent, salaries, malpractice insurance and website costs.
Other expenses are variable based on production and sales. These include inventory such as fillers, sutures and equipment disposables. Forecasting revenue is naturally more difficult than determining fixed costs. A simple rule of thumb is to under-project revenue and over-project expenses. This conservative approach leads to far fewer headaches in managing cash flow.