Don't settle for a high-priced bookkeeper: What you should expect from your accountant. (Practice Management).
With tax season just around the corner, chances are good that you'll see some large invoices from your consulting CPA in the next few months.
As you sign those checks, you may wonder, "Just what am I getting for all this money?"
These days, every practice needs an independent accountant, but individual financial advisors vary widely in usefulness to their physician clients. If you tend to view your CPA as little more than a "necessary evil," you may not be getting all the service you need to manage your practice's finances effectively.
Above all, make sure your CPA's primary role is to provide sound advice.
You typically have far more direct contact with your accountant than with other consultants, lawyers or advisors. This puts your accountant in the best position to understand your practice and where you want to take it.
Charge your accountant with this principal responsibility, and expect your CPA to take a lead role -- actively offering suggestions to improve managing your practice's finances. Don't put up with the typically passive accountant who waits around for a client to order a service.
Tell your CPA up front that keeping in compliance with sound business principles is a top priority.
Look for an accountant with many other medical practice clients -- one who understands a physician office's unique needs. A CPA specializing in medical practices -- or at least having plenty of experience -- can better understand, anticipate and respond to your major business concerns.
Except for very large groups, medical practices rarely require certified -- audited -- financial reports. You don't need to pay for such an expensive level of accounting to receive accurate financial data useful in making sound decisions.
But, assign your independent CPA the lead role in setting up and monitoring your internal financial controls.
Embezzlement happens far more often than you think, often pulled off by the most trusted employees. Use your accountant's auditing expertise to help "theftproof" your office. Work together to set up systems for:
* Handling cash
* Posting charges, receipts and adjustments
* Authorizing checks
* Ordering supplies
* Maintaining database integrity
Bookkeeping and reporting
With accounting software becoming more user friendly and cheaper, there's little reason for an independent CPA to do your check writing, bookkeeping or payroll management.
Moving these basic accounting functions in-house cuts your costs and puts essential financial information at your fingertips. Payroll is an excellent candidate for outsourcing to an independent service, often better and less costly even than going in-house.
Have your accountant set up your in-house bookkeeping system and periodically monitor it to ensure its effectiveness. With Internet or direct modem communication, your accountant can pick up the essential data from your in-house system and analyze it without a trip to your office.
Insist that your CPA's reports effectively help you evaluate your practice's performance.
Far too often, accounting information fails to support your decision-making. A CPA who understands medical practices should be able to set up an appropriate chart of accounts and produce reports that highlight meaningful practice performance benchmarks.
What you hopefully end up with is a financial advisor who can meet your business needs without compromising sound accounting principles. An accountant not up to this challenge deserves to be replaced.
Choose the CPA who best serves your practice as the client, separating whether the CPA should also be your personal tax advisor.
While solo and very small groups have typically used the same accountant for practice and personal purposes, you can break with tradition if it suits you.
Groups increasing in size and complexity sometimes outgrow their accountant's capabilities. And individual members of a growing physician staff should feel free to obtain services from whoever best fits their personal needs.
Just make sure your CPA meets your practice's business needs, regardless of who advises you personally.
Me ...a layman?
Most mere mortals can't be experts in every field -- and today's complex business systems and multi-layered tax laws demand a specialist's attention.
So expect to pay a fair price for professional help, but keep it under control.
CPA fees should depend on the level of time and attention you require. As you move routine work in-house, be sure your accountant lowers charges accordingly. Be willing to pay hourly rates for time devoted to advisory and financial oversight, but draw a hard line against increases for other reasons.
Obtain an advance agreement on fees when you sign the engagement letter at the outset. Requiring your CPA to break services into components helps keep the fee agreement more realistic and lets you see more precisely what you're paying for.
Then, insist on monthly bills that relate back to those components so you can control costs.
Good accounting advice doesn't come cheap, but a well-qualified professional who essentially partners with you on your business venture is a valuable resource.
If your CPA doesn't meet the requirements, go ahead and fire yours and find a new one who will serve your practice's real needs.
Advisory Publications, based in Conshohocken, Pa., is a monthly newsletter service that publishes The Physician's Advisory, a newsletter that includes advice on business, tax, management and financial matters involving health care.
RELATED ARTICLE: IN THIS COLUMN...
Do you know how to spot a good accountant? Is your accountant looking out for you? In this new column dedicated to managing small and solo practices, learn what your accountant should be doing to help you control finances at your practice.
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|Article Type:||Brief Article|
|Date:||Jan 1, 2002|
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