Are You Losing Money In Your Mental Health Practice?
Dear Dangerously in Love with Your Finances,
We are a mental health practice located in Dallas, Texas, with in-house counselors, psychologists, and psychiatrists on staff. I am one of three partners who acquired the mental health and counseling center two years ago. I recently started digging deep into the business finances and feel like something is wrong. I am no accountant, but it seems like the center is spending more money than it is bringing in. At this rate, we may have to take out a short-term loan to meet payroll in a few months. How do I stop the bleeding?
– Losing money in my mental health center
Dear Losing money in my mental health center,
You don’t have to be a bookkeeper or accountant to notice a disconnect between your income and expenses.
As a business owner, it is always best to follow your gut, especially when it comes to your business’s finances.
No matter how much revenue your mental health practice brings in, if the expenses are more than revenue for a period of time, you will be out of business.
Find out what is happening within your mental health practice by answering the following questions:
- What is the average rate per counselor, psychologist, and psychiatrist?
- How many clients does each counselor, psychologist, and psychiatrist see each week?
- How long does it take each counselor, psychologist, and psychiatrist to complete their therapy notes?
- How long does it take for each insurance company to pay claims?
- Is the front desk collecting co-payments from each patient before or after each visit?
- What is the medical biller’s process to follow-up on outstanding claims with insurance companies and patient’s balances?
It’s essential to understand the center’s processes to pinpoint the changes that need to be made. You may be surprised that you may only need to make a few small changes. Small changes can result in significant results.
Here are a few general articles that may be able to help you make the tough decisions:
The Impact of Cutting Expenses on Net Income
5 Ways to Increase Revenue By Reducing Expenses
Is it More Important for a Company to Lower Costs or Increase Revenue?
Please reach out if you need assistance answering the above questions or any other bookkeeping and accounting question within the mental health and counseling center.
As always, stay Dangerously in Love with Your Finances,
Lozelle
