Accounting can take on a different dimension of complexity in the healthcare field. Your oral radiology practice accounting may need to address the same challenges all other businesses face, including revenue recognition and deciding between cash or accrual accounting.
You may also need to navigate private and government insurance programs like Medicaid and Medicare. Our oral radiology practice CPAs recommend seeking the assistance of experts who may understand the difference between fee-for-service compensation and value-based reimbursement. The latter may put more pressure on your practice to control costs and quality.
Choosing Your Oral Radiology Practice Tax Planning Method
It may be beneficial for you to choose if you use an accrual or cash accounting method. The accrual method is where revenue and expenses are recognized when they are incurred or earned. Whether or not you receive payments from your client or insurance company, may not be a significant aspect if you opt for accrual.
For example, if a client visits your practice looking for a Cone Beam CT scan under the cash method, you most likely would record the procedure when you get paid for it as opposed to when the expense is generated. For this reason, the cash accounting method may not function well in the medical field.
Conversely, with the accrual accounting method, the revenue and expense of the procedure would be recorded at the moment. The accrual method may give your oral radiology practice CPA a good picture of what is happening during the quarter. The downside with the accrual method may be that because of its complexity, it will require the use of accounting software you might be unfamiliar with operating. However, this approach may be the best for practices who are seeking growth and expansion.
Understanding and Accurately Reporting Depreciation
As a healthcare provider, you may use equipment and commercial buildings and rely on an IT infrastructure. With time, these things may depreciate. A good Oral radiology practice bookkeeping service includes calculating this depreciation and then allocating a depreciation expense for each accounting period.
Accurately Recording Who Is Paying You
Your oral radiology clinic is likely paid by both private and public entities. So, your accountant may need to account for revenue from hundreds of different payers. At Fusion, we aim to communicate the importance of accurate oral radiology tax planning, and documenting the portion of revenue that comes from each type of payer may be an essential element of staying organized for your practice.
Deciding Whether to Incorporate the Practice
- Oral radiology practice tax planning might involve determining whether to incorporate your practice. Medical and dental practices can sometimes be businesses with high liability. Incorporation may limit the liability of shareholders. This can have the possibility of allowing shareholders freedom from responsibility for debts in case of liabilities or lawsuits. An oral radiology practice finance advisor can look at your practice and may walk you through the steps of incorporating, which usually include:
- Selecting a business name
- Filing articles of incorporation on a state or federal level that layout where the business is located, plans for shares allocation, and other basic information
- Creating corporate bylaws that outline things like when annual shareholding meetings will be held
There are some fees associated with incorporation and some annual filings. However, your oral radiology practice financial adviser can help you balance these against tax savings you may receive.
Maximize Profitability With Advice From Experienced Professionals
Tax planning may be the key to reducing your tax liability. At Fusion CPA, we offer more than basic tax compliance or simple tax savings strategies. Part of our full-time CFO business advisory service is looking for ways to minimize your taxes throughout the year, not just when the time to file taxes approaches. We may be able to file federal, local, and state taxes — depending on your circumstances.
Our team can consult with you on unemployment, sales, and property taxes, and our approach to oral radiology practice accounting is proactive, not reactive. To manage your radiology practice profitably, you may need additional expert assistance. In that case, we offer oral radiology practice CFO business advisory to help navigate your business investment choices and more. 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.