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March 5th, 2014
Most people think that doctors are just health professionals, but those who have private practices are also skilled entrepreneurs. Or at least they should. This article from CNN.com points out that many doctors are teetering on the edge of financial collapse due to poor money management:
Doctors may be experts at treating patients. But when it comes to running their own businesses, many are making rookie mistakes.
And that’s driving many private practices doctors to the brink.
Physicians are poor businesspeople, because they “tend to be so engrossed in the medical part,” said Dr. Jeffrey Meltzer, 47, an OB/GYN with American Health Network in Carmel, Ind. “It’s an all-encompassing job and takes a huge part of their time…”
Furthermore, they are also liable to making a financial mistake that everyone commits—living beyond your means:
“Everyone assumes all doctors are rich,” said Dr. Jim Dahle, an emergency physician in Utah. “When you start believing that, too, you start living beyond your means.
“Doctors should live by the one house, one spouse mantra,” he said. “Most doctors have their earnings delayed by 10 to 15 years. The average physician can’t [afford to] have two or three houses and then also save for retirement.”
As you can see, doctors should pay attention not only to the number of patients that walk through the door, but to the amount of money they earn as well. Of course, giving quality medical treatment and keeping tabs on your finances isn’t easy—many practitioners don’t have the time nor the expertise to keep a tight record book, process Medicare billings, and submit tax returns on time.
Fortunately, medical accountants from Melbourne firms like MEDIQ Medical Financial Services can help you keep track of your money so you can focus on treating patients instead. Aside from the accounting services mentioned above, they can also do expense claim and controls, government or employer record keeping, and process your payments for BAS, GST, PAYG and superannuation contributions. They provide tax minimisation strategies too, so you won’t have to pay more taxes than you absolutely have to.
When you operate a private practice, you are the captain of the ship. Unfortunately, the financial mistakes that doctors commit are like holes that will slowly but surely sink the vessel. Medical accountants help you keep track of where your money goes to maximize your practice’s profitability and as well as your income.
(Doctors’ money mistakes, CNN.com, January 16, 2012)