Financial Controller of Medical Practices - Healthy Bodies of Finance

Dear Dangerously in Love with Finance,

I am the practice manager of a growing medical practice in Bozeman, Montana. I manage a staff of four doctors, two nurse practitioners, four medical assistants, two administrative staff members, and one bookkeeper. As our medical practice continues to grow, the bookkeeper is getting overwhelmed by the increasing complexity of our finances. I suggest the owner hire a part-time financial controller to help manage our accounting and finances. However, I have a few questions regarding financial controllers for medical practices. What does a financial controller do? How might their role differ from our bookkeeper? How does the financial controller’s position align with and interrelate with our current team, and to what extent is the function of strategic decision-making their responsibility?

Regards,
Medical practice manager seeking financial controller clarification

Dear Medical Practice Manager,

Good job on the growth of the medical practice! There’s no doubt that growth means you guys in Montana are doing something right.

Naturally, with all this growth, your medical practice’s accounting and financial work will multiply many times over. Let’s learn the roles and responsibilities of how a financial controller can support your medical practice.

A Financial Controller vs. a Bookkeeper: What Each One Does

The task of a bookkeeper:

Your current bookkeeper is responsible for keeping all your day-to-day financial records.

Some of the core functions include:

Recording Transactions: The bookkeeper ensures that all the financial transactions are correctly recorded. The bookkeeper keeps accounts of what is owed to and by the medical office in accounts payable and receivable.

Reconciliation of Bank Statements: Ensure that the medical practice’s financial records agree with the bank statements being presented.

Production of Basic Financial Reports: includes profit and loss statements, balance sheets, and cash flow statements.

Your bookkeeper is tasked with managing your medical practice’s accounting and finances, but their goal is to ensure that what is recorded is accurate and that you have good accounting records.

Duties of a Financial Controller:

A financial controller has a slightly broader and more strategic role.

Here are some of the critical tasks of a financial controller:

Financial Reporting: These are detailed and comprehensive reports that should delve more deeply than the basics.

Budget and Forecast: Develop budgets and financial forecasts to guide the financial planning of the medical practice.

Financial Analysis: Monitor financial data for emerging trends, variances, and opportunities for improvement.

Internal Controls: Devise and oversee internal controls to safeguard the business against fraud and errors in financial reporting.

Compliance: Ensure financial law and regulatory compliance in the practice.

Strategic Planning: Participate in the strategic decision-making process with the required views and projections in place.

Seamless integration within your existing financial team: A financial controller doesn’t aim to replace your bookkeeper; rather, it complements your bookkeeper’s work.

How does a part-time financial controller integrate with your medical team?

Collaboration: The financial controller will liaise with the bookkeeper regarding financial data. They will rely on accounting records to prepare in-depth financial reports and analyses.

Supervision: The financial controller will oversee the bookkeeper’s work, provide guidance, and ensure that all financial processes are efficient and accurate.

Training: They might also offer your bookkeeper and administrative staff training in new financial procedures and systems.

Coordination: Your team’s other members, such as doctors and administrators, will have to be coordinated so that they provide him/her with the necessary information to plan and report financially.

How does the financial controller help with strategic decision making:

A financial controller is critically engaged in the strategic decision-making process within a medical practice.

Here’s how they help in the decision-making process:

Preparation: long-term plans aligned with set goals to ensure sustained growth.

Cost analysis and the identification of inefficiencies: Helps cut down on expenses without affecting quality care.

Investment Decisions: The financial controller will provide an understanding of potential areas for investment, depending on forecasted financial data, which can be in terms of new equipment or other investment areas.

Risk Management: They shall identify the financial risks and provide strategies to manage them to protect their financial health.

Performance Monitoring: Monitor performance relative to budgets and forecasts for all your stakeholders so that they can advise if any relevant remedial action is needed.

What are the significances of financial management for Doctors in medical practice:

Proper financial management among doctors is indispensable in ensuring the correct operation and growth of the practice.
It provides a sense of security and control. Here’s why:

Sustainability: Sound financial management will guarantee that the practice remains stable and afloat to deliver quality care

Resource Allocation: Proper oversight in finance ensures that resources are effectively deployed, eliminating waste and ensuring that every department or resource is well funded.

Compliance: Staying within all the laws and policies financially avoids law cases and fines.

Staff Satisfaction: Effective processes in payroll and budget preparation ensure that staff gets paid on time and also gets funds for training and development opportunities.

Patient Care: Good financial management means that more money goes to patient care, whether it is new equipment or facilities or employing staff members.

Hiring a part-time financial controller could be a monumental step forward for your growing medical practice.

A medical practice’s financial controller is a strategic level of financial expertise that goes beyond the day-to-day accounting activities of your bookkeeper. By interacting with your existing team and playing a pivotal role in decision-making, a financial controller can help ensure that your medical practice not only continues to thrive but also has the potential to grow even further.

So, take that leap and bring in the expertise you need to manage your finances effectively.

Best of luck with your growing medical practice! If you need any accounting, bookkeeping and financial management support for your medical practice – please reach out. As this is what we do….

Warm regards,
Dangerous in Love in Your Finance

Lozelle Mathai, MBA, Certified Forensic Examiner
Your health and wellness accountant

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This article is designed to provide information only and should not be considered legal or tax advice. Because of the complexity of the law and the variables in your own personal tax and accounting situation, you can’t rely on our advice specifically related to your unique circumstances. In order to get the best tax savings and legal advice available to you, you should consult with your own accountant, attorney or advisor regarding your particular facts and circumstances. Healthy Bodies of Finance is an accounting firm that specializes in working with health and wellness providers. We provide monthly accounting & bookkeeping services and financial education. For more information on our specialized services for health and wellness providers please contact us at [email protected]