You spent countless hours mastering the art of patient diagnosis, memorizing symptoms, treatments, and medications.
Yet somehow, no one thought to mention that running a successful practice would require an entirely different diagnostic skill set—one focused on financial health.
Fear not, overworked physician.
You can apply the same methodical approach to your practice’s finances that you do to patient care, and it won’t require abandoning your stethoscope for a spreadsheet 40 hours a week.
The Financial Physical Exam: Same Skills, Different Patient
Remember your first patient examination?
The nervousness, the systematic approach, the search for vital signs that would reveal the underlying condition?
Your practice’s financial well-being requires the same careful examination.
Just as you wouldn’t diagnose a patient without checking their vitals, you shouldn’t run your practice without regularly checking its financial signs.
The good news? You already possess the analytical skills needed.
The better news?
You only need 30 minutes a month to perform this financial check-up—about the same time you spend on a comprehensive patient visit.
The Holy Trinity of Financial Diagnosis
Just as medicine has its essential diagnostic tools, financial management has its own sacred trinity.
These three statements work together to provide a complete picture of your practice’s health:
The Profit & Loss Statement: Your Financial Blood Test
Think of your P&L as the comprehensive blood panel of your practice’s finances.
It reveals what’s flowing in (revenue) and what’s flowing out (expenses) over a specific period.
Like abnormal blood work, unusual fluctuations in your P&L can signal problems requiring immediate attention.
That means keeping an eye out for outlier amounts in specific categories of overhead also.
Key Vitals to Monitor:
✓ Revenue trends,
✓ Expense categories exceeding normal ranges
✓ Sudden drops in profitability
The Balance Sheet: Your Financial X-Ray
If the P&L shows what’s flowing, the balance sheet shows what’s accumulated—a snapshot of your practice’s assets, liabilities, and equity at a specific moment.
Like an X-ray revealing bone structure, your balance sheet exposes the fundamental financial structure supporting your practice.
Red Flags to Watch:
✓ Climbing debt-to-asset ratios,
✓ Shrinking equity
✓ Distributions in one tax year greater than net income
✓ Significant changes in long-term assets without corresponding strategic decisions.
The Statement of Cash Flows: Your Financial EKG
While profit looks good on paper, cash is what keeps your practice’s heart beating.
This statement tracks the actual movement of money, revealing where cash comes from and where it goes.
Like an EKG monitoring heart function, your cash flow statement shows whether your practice has the lifeblood needed to sustain operations.
Warning Signs:
✓ Consistent negative cash flow despite profitability
✓ Major cash expenditures without strategic planning
✓ Insufficient cash reserves for typical monthly fluctuations
Your 30-Minute Monthly Financial Appointment
You wouldn’t expect a patient to self-diagnose a complex condition.
Similarly, these financial tools require interpretation.
Schedule a standing 30-minute appointment with yourself each month to review these statements.
Look for patterns, ask questions, and make notes for follow-up—just as you would during patient rounds.
When You Need a Financial Specialist
Sometimes even the best diagnosticians need a specialist’s opinion.
That’s where we come in.
Our firm specializes in the unique financial challenges of medical practices, offering:
✓ IRS Compliance and Tax Planning: Because the only thing worse than an IRS audit is a malpractice suit
✓ Profit and Cash Flow Management: Ensuring your practice remains financially healthy enough to care for others
✓ Business Advisory Services: Helping you make strategic decisions based on solid financial data
Just as you wouldn’t hesitate to refer a patient to a specialist when needed, don’t hesitate to reach out when your practice’s financial health requires expert attention.
Your practice deserves the same level of care you give your patients.
Start with 30 minutes a month, and call us when you need a second opinion.
I’m currently accepting new clients and offering comprehensive tax planning services that could save you thousands annually.
Consider this your referral to a tax specialist who speaks both “doctor” and “IRS” fluently.
Let’s schedule your financial check-up before tax season reaches critical condition.
Use the link I’m providing below now to choose the time to talk that is most convenient for you.
Imagine having a financial coach and compliance expert by your side, so that you can focus your professional clinical time where it belongs: on patient care.
Does that sound good?
Then reach out to me, and let’s talk: Free Tax Strategy Analysis