Our last blog article detailed the information that your CFO would expect your spouse or long-term partner to know in case of an emergency. Serious injury, illness, or death of a practice owner would leave the spouse to carry on indefinitely or until the sale of the practice. To do so, they would need to know the locations of accounts, the difference between cash flow and profit, how to interpret profit and loss statements, and the details of the owner’s will and insurance policies. It would be helpful if they were present at monthly or quarterly financial meetings and maintain a relationship with the practice manager.

Although it is somber to anticipate something incapacitating happening to the practice owner, it is something that the spouse should be prepared for. Our last poll asked “Do you Have an Individual Disability Insurance Policy?” Seventy-five percent said “No” while 25% said “Yes”. A policy like this will cover any overhead expenses, such as employee wages and practice bills in the event of serious injury or illness. It is definitely something to consider to add a layer of protection to your practice.

It is common for people to not understand the difference between a Chief Financial Officer (CFO) and a Certified Public Accountant (CPA) and though they are similar in the fact that they both deal with your practice finances, A CPA focuses on business structure and taxes, while a CFO focuses on operational performance, budgets, plans, management accounting and more.

Since we have already covered the important things that a CFO would need from a spouse acting as the owner, this article will focus on what your CPA would expect your spouse or trusted long-term partner to know should the owner be unable to perform their obligations to the practice. 

Attend Quarterly or Annual Tax Meetings

  • Being present at these meetings will increase basic knowledge of most items to follow.
  • This will also help develop a trusted relationship between the CPA and the spouse.
  • Any questions, recommendations, or updates can be discussed at these meetings.

Be Familiar with Practice Valuations

  • This is the fair market value of the practice.
  • Different approaches should be understood; income, market, and cost. Each will have unique results.

Track Cost of Overhead

  • Understand what is included in overhead expenses.
  • Measure as a percentage rather than dollar amount. Overhead Costs ($)/Revenue ($).
  • Ideally, the benchmark percentage should be under 35%.

Be Able to Locate Previous Years Tax Forms

  • These records should be kept indefinitely.
  • Use a good record keeping system. It is much easier to be prepared for an audit by being organized.
  • Keep receipts and documents filed with the corresponding year’s tax forms.

Know Locations of Stock Investment Accounts

  • Have record of name and account number.
  • You may need to pay taxes on investment of stocks, bonds, mutual funds or index funds.

Have a List of Charitable Deductions

  • Keep receipt and proof of donations.
  • Depending on type and amount of charity, an organization may need to provide you with statement describing the donation.

Know Taxpayer Identification Number (TIN)

  • This is required to pay business taxes, bill insurance, and pay employees.

Keep up on Relationships with Other Practitioners

  • Having a good relationship with specialists in the field will provide a spouse with a good support system should something unfortunate happen.

Outside of clinical responsibilities as a doctor, the practice owner has many duties running a business. Though owners should have many professionals (CPA, CFO, Wealth Advisor, Insurance Agent, and Lawyer) helping them run the business side of the practice, there is some rudimentary knowledge necessary that should be known by both the practice owner and their trusted long term partner. Many doctors are able to keep their practice until retirement however, there are some circumstances where the spouse or long term partner will need to adapt and take over as the owner.


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The reason we are publishing these articles is so that your office can increase its success. We appreciate your feedback on how we can help you more and love it when you pass these articles along to other practice owners and office managers.

Developing a management report is not easy and Doctors CFO currently has a robust model for most practice types that is customized for our monthly and bi-monthly clients. If you have questions on how this model applies to your practice or you are interested in applying the Doctors CFO model in your practice, via one of our annual, bi-monthly or monthly assessments, please contact us.

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