Importance of Running Financial Reports for Your Practice

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Importance of Running Financial Reports for Your
Practice

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When was the last time you reviewed financial
reports for your practice? If you cant remember,
then now is the right time to start because
handling the business end of healthcare is
equally important. If you dont have a good
understanding of financial reports, then you will
be missing out on key metrics that are required
for making good business decisions.
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In-depth understanding of reports will help you
identify potential financial problems and shed
light on areas that need your focus. All this
will help you grow your practice. Here are a few
basic financial reports that healthcare providers
must review on a regular basis Profit and Loss
Statement (PL) is a report that helps providers
track revenues and expenses. It shows the
profitability of the practice and aids in
tracking key indicators like, number of
procedures, total encounters, total collections
and charges. If the report shows a sudden drop in
collections then consider it a red flag. However,
it is better to look for an explanation behind
the warning signs before you decide a course of
action.
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It is necessary to go through balance sheets to
know what your practice owns as well as owes.
This sheet will have items that might not show up
in a Profit and Loss Statement. Another
important financial report that you should review
periodically is the accounts receivable ageing
report. Through this report, you will get to know
the amounts owned by patients along with the
length of time the money has been unpaid. If it
takes more than 45 days for the claim to be paid,
then it will become necessary for you to see if
the claim has been denied or rejected. For claims
not paid for 90 days, urgent attention will be
required.
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Fourth report on the list is the provider
productivity report which is a measure of what
each physician is contributing to the practice.
By going through this report, it becomes easy for
practice managers to spot areas of weakness and
strength. It also helps them increase the revenue
producing activities. It is important to study
the Explanation of Benefits (EOB) report in order
to determine the reason why claims are getting
denied for your practice. This repot is very
important because denied claims lead to cash flow
problems. Spotting trends early will help you
make a difference.
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