An optometrist’s office is really running two businesses at the same time. On the one hand, the optometrist has their clinical practice where they help patients with their vision. The second side of their business is selling eyeglasses, lenses, frames, contacts, and other vision wear. All told, this is a complicated and time-consuming business that requires detailed optometrist practice bookkeeping, tax planning, and accounting.
Invoicing and Medical Billing Challenges That Impact Optometrist Practice Bookkeeping
One of the most significant factors that impact optometrist practice accounting is getting paid in a timely fashion. On the books, an optometrist may be profitable, but if they have a hard time getting their patients to pay them, their cash flow is inevitably impacted. This makes it difficult for the optometrist to do things like pay rent on their office space, pay employees, and buy the supplies and products they need.
Some optometrist practice CPAs use medical billing software or specialized accounting software like QuickBooks Online to help them generate invoices and send payment reminders to patients. Optometrist practice accounting may be improved by the optometrist offering multiple payment options. Online payments, credit card payments, cash, checks, and even cryptocurrency payments increase the likelihood that patients will pay for the services they receive.
Ways to Optimize Your Optometrist Practice Tax Planning
Even if your optometrist practice is well-established, your tax preparation could use a review. The type of tax return you file for your business matters greatly. If you are filing as a sole proprietor or a partnership, could your tax liability be lowered by filing your business as an S Corporation?
Your optometrist practice tax planning might include determining whether to purchase or lease equipment. There is no absolute right answer. However, if you are buying equipment using financing, you have to pay the principal plus the interest. In this case, only the interest is tax-deductible. Your optometrist practice CPA might not even consider the principal as an expense on your profit-and-loss sheets. Instead, paying the principal is considered repayment of the principal. Conversely, if you lease, 100 percent of the lease payment might be deductible in the year that you pay for it.
Finally, don’t forget the small things. For example, do you use your personal cell phone or Internet to handle emergency calls or log into your EHR system? Make sure you are deducting part of your home Internet use and your own cell phone use. What about your scrubs? Do you have them professionally cleaned? Hold onto those receipts as those expenses may be deductible, too.
Reliable Financial Advice from an Optometrist Practice Financial Adviser
Fusion CPA is an experienced optometrist practice financial adviser. We do more than help you remember that April 15 is tax day. We use our experience to help you with all aspects of your optometrist practice.
Our bookkeeping specialists can help you monitor your cash flow, expenses, and payroll and keep you in compliance with filing and tax regulations. Our business advisory service can provide an unbiased outside look into the financial workings of your company. Let us help you with creating detailed accounting reports, contract negotiation, and project counseling. 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.