At the end of the day, what can I take home? That question is not merely popular, it is also a very relatable and understandable question. Physicians work hard and provide a valuable service to the communities in which they live, work and enjoy. It stands to reason that those who have triumphed through the affliction of medical school and provide day-to-day value to their community should have a good understanding of how they get paid.
Common Questions About Compensation For Physicians
Questions about compensation can seem benign but can have many layers of complexity underneath the surface:
- Am I being paid fairly?
- What services of the practice are the financial strength? What are the weaknesses?
- What financial area needs the most attention?
- How is cash flow effectively managed while maximizing compensation?
- Are there compliance issues that need to be identified and addressed?
- Is there an effective tax mitigation strategy in place?
How Profit Center Reporting Can Help Answer Those Questions
The accounting prescription for these (and many other) questions is profit center reporting. profit center reporting is a full-view approach to financial reporting. A competent profit center financial report will identify each provider and service within the practice that generates revenue and then identify the expenses incurred to produce the revenue, matching the revenue with applicable expenses to give the owner physician(s) an understanding of profitability for each individual provider and/or service line within the practice.
Some of the benefits of profit center reporting include:
- Acting as a tool that can be used to help make management decisions
- Reflecting agreed-upon compensation models, taking the guesswork out of “how much can I take home?”
- Motivation for team; profit center managers are equipped to take personal responsibility for their service line
- Help to implement and maintain tax mitigation strategies
Profit center reporting is an essential part of operating a healthy practice, contact us today for more information on how to implement robust reporting in your practice.
