As an endocrinology expert, you help people identify and address issues affecting their endocrine system. Assessing the financial health of your business is similar. Your training allows you to identify symptoms and give your patients the best advice on dealing with the problem. An endocrinology practice CPA performs the same job. They identify issues affecting the health of your finances and find ways to address them.
Unfortunately, your decades of studying medicine may not prepare you for the financial aspect of your practice. To help you out, here are some basic things you need to know about your endocrinology practice tax planning and bookkeeping.
Unique Challenges In Endocrinology Clinic Bookkeeping
Medical practices like yours face challenges that are not present in other types of businesses. The most common issues include your accounting method and revenue recognition. Your endocrinology practice bookkeeping may employ one of two accounting methods, namely, the cash method or the accrual method.
The cash method of accounting requires endocrinology practice accountants to recognize revenues and expenses when cash enters and leaves your business. It is the simpler method as it minimizes the need for computing the correct amount. It may be used by smaller practices that are not aware of the benefits of bringing in an endocrinology practice CPA to manage financial records.
The accrual method, on the other hand, allows you to record revenues and expenses when they are earned and incurred regardless of when they were paid. The accrual method of accounting is the generally preferred method as it produces a better matching between your revenues and expenses. For example, insurance companies often take months to pay services that you’ve rendered. With the accrual method, your endocrinology practice accountant will record your sales immediately, along with the costs of your services. Hence, you will have a financial record that reflects your financial health more accurately.
Reporting Guidelines: Tips For Endocrinology Practice CPA Tax Planning
Your endocrinology practice should adhere to the General Accepted Accounting Principles (GAAP). Here are some of the things your financial report should include based on GAAP:
statements of operation
changes in net assets
Your reports may be viewed by public institutions, senior management, and hospital trustees. Not following GAAP may result in hefty fines that can hurt your business. There is also additional information that must be included if your endocrinology practice is tax-exempt. For this reason, bringing in an experienced Endocrinology practice accountant can be beneficial. They are accounting experts in all aspects of your industry and can help ensure your practice stays in compliance with government regulation, which, in turn, can minimize your revenue loss.
Best Practices For Endocrinology Clinic Tax Planning
One major aspect of your taxes that you should pay attention to is your deductions. When tax planning, your goal should be to estimate your total deductible expenses during a tax period in order to identify the possible amount to be deducted from your estimated revenue for the year. After doing so, you should compute your potential taxes for the period. However, there are GAAP guidelines that you should be aware of when tax planning. Our team of accountants here at Fusion CPA can help ensure all your reports abide by these vital principals.
Our focus is to help you transform your financial management processes. We have expertise in endocrinology practice tax planning and bookkeeping. We also offer Endocrinology practice CFO advisory. You can learn more about our services by clicking the button below to schedule a complimentary discovery call today!
This blog article is not intended to be the rendering of legal, accounting, tax advice or other professional services. Articles are based on current or proposed tax rules at the time they are written and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.