What Are the Roles a CFO?
Updated: Oct 25, 2019
The focus of last week's post was the Roles of a Mid-Level Provider. We recommended that the six essential functions were to support the owner and practice manager, support team members, provide preventative and therapeutic treatments, sell medicine or dentistry, promote compliance with laws, and stay relevant.
Because the doctor is typically also acting as the owner, their time is valuable and should be spent on procedures that require their license and expertise. In our poll, we asked "Is There More You Should Delegate to Your Mid-Level Providers?" Eighty percent said 'Yes' and 20% said 'No'. As the owner, you should feel confident enough in your mid-levels to be able to delegate anything and everything within their scope of practice. This will ensure that clinical time is reduced for the doctor so that they can also focus on the higher margin procedures and business side of the practice.
If you want to run your practice as a profitable business, it is a good idea to hire an external CFO (Chief Financial Officer). A CFO has the power to take practice numbers and turn them into a valuable analysis. The complete list of questions is endless so here are a few important questions they should be able to answer:
'Is my practice profitable?'
'How can my practice become more profitable?'
'Am I overstaffed/understaffed?'
'Do I need to see more patients?'
'Do I need to be open more or less days?'
'When should I bring on an associate?'
Roles of a CFO:
Prepare a Management Report
For most practices, we recommend a monthly management report that provides competitive analysis.
This report will provide new insights on your practice as you offer different treatments, add more providers, or add more locations.
It will supply motivation for new goals.
Advise on Specific Costing Levels for Staff, Supplies, Admin and more.
If you plan to grow your practice, it may be beneficial to add another provider.
The analysis of practice numbers will identify whether you are understaffed or overstaffed.
Areas where costs should be reduced will be identified.
Advise on Equipment Purchases
Would new equipment provide more profit for your practice?
How much does the procedure need to cost for it to be worth purchasing?
How efficient is the procedure? You could be losing money if you are not charging enough per procedure.
Run Management Meeting
Using a management report, your CFO should lead the direction of the management meeting.
Emphasis should be placed on goals and the Key Performance Indicators that reflect those goals.
Recommendations on how to bring costs down should be given.
Recommendations on how to increase production should be given.
Advise on Business Strategy
Examples include should I acquire or be acquired?
Should I merge with an existing business?
What new product or services should I consider?
What products or services should I eliminate?
Does is makes sense to expand or relocate?
When should I sell?
Act as Trusted Advisor
A CFO should be able to reduce the amount of stress that the owner is under by taking the guesswork out of running the business side of the practice.
Because of their experience with medical or dental practices as a business, they know what numbers to focus on to increase profit.
They should be able to provide a way to achieve financial security for your practice.
Doctors CFO offers many tools that can guide you into making beneficial decisions for your practice. Our newest and extremely popular tool is the Pricing Model. It functions to help you make equipment purchase decisions and will provide 100's of different scenarios related to usage and cost. We also offer a Daily KPI Tracker, New Patient Tracker,and Salary and Raise Planner. Collectively, we offer a program called Doctors MBA which includes all of these tools with the training you need to be successful using them and analyzing the results.
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. If you have a question that you would like answers to in a blog post, please email it to email@example.com. If you have not signed up for our blog, please do, so you can continue to receive these important insights and participate in our weekly polls.
Doctors CFO has a CFO Management tool to help you track your KPIs. You might also be interested in our New Patient Tracking Solution and a Salary Planning Solution, to see these and other products please go to please go to https://www.drcfo.com/shop.
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 reach out to us as firstname.lastname@example.org. Doctors CFO provides financial analysis and valuations for doctors and dentists in the United States. We also offer programs for new patient marketing, revenue and collection management, medical practice consultant, dental consultant, and practice analysis.
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