This article was updated on 4/19/2024 to provide updated information.
Financial reporting is one of the biggest business management challenges for independent GI physician practices and ASCs. This task, while confusing and time-consuming, is essential. Those who are unfamiliar with proper reporting processes may be at risk of reduced insight into practice or ASC financial trends, as well as potential fines.
“Financial reporting is one way to really tell how the business is performing,” PE GI Solutions Chief Financial Officer and Vice President of Finance, Tara Hamburger, said. “It’s the best way to gauge profitability and performance.”
PE GI Solutions is now a part of SCA Health.
Why Worry About Proper Reporting?
In addition to the legal obligation, financial reporting serves as a valuable tool for gaining a better understanding of various aspects of your practice or ASC. It can provide insights into creditworthiness and aid in day-to-day decision-making processes. Failing to meet set guidelines can lead to potential litigation from outside sources, such as the IRS, and lead to further complications for your business.
Netsuite.com lays out nine reasons financial reporting could go wrong and open up your location to potential trouble:
- Inadequately trained staff
- Personnel who are not up to date on the latest guidelines and regulations
- Doing the process manually
- Unclear communication
- Poorly integrated financial systems
- Inadequate review processes
- Inconsistent accounting methods
- Miscoding invoices or transactions
- Deliberate fraud
Each of these aspects, whether intentional or otherwise, brings unnecessary risk upon yourself, your staff, and your practice or ASC. Ensuring you are current on financial reporting guidelines is the best way to protect yourself from errors or penalties.
How to Improve
One of the best ways to protect yourself from errors is to have safeguards, such as a corporate partner to assist in the reporting process. SCA Health is an example of such a partner.
“One of the big ways we help our partners is through the financial reporting,” Hamburger stated. “I’ve often seen practices and centers using cash statements prior to partnering with us, which is good because you need to understand your cash flow, and know where cash is coming in and going out. However, the thing about cash statements is that it’s hard to understand productivity through these reports.
She continued, “when we assist partners, we will use an accrual basis. When we gauge things on a accrual basis we can really see how a location performed versus when the cash hits the bank later that month. When we provide statements, we will provide a cash statement and an accrual statement, this way practice or center leadership can really understand where they were performing best or what changes can be made to improve.”
Understand the Deeper Statistics
Hamburger explained that understanding financial statistics can provide meaningful insight into the productivity of your practice or ASC.
“What we give our partners is information on revenue per procedure, revenue per patient, and cost per procedure,” she said. “We will break it down and help them really understand where the costs are when you break it down into the nitty gritty aspects of the business.”
Further information, such as the profit margin, can also come in handy, especially when working to create budgets for your location.
“We will compare that information to the budget for the current year, as well as the previous years,” Hamburger said. “We do that because it’s extremely important to understand how you are performing in comparison to last year. When we do that, we also go over any variances and work to help our partners understand why things may have changed.”
Financial reporting is a key aspect of any successful business. It involves understanding the numbers, identifying variances, and creating plans to improve. While it can be challenging to comprehend initially, taking the time to learn about financial reporting can be a valuable tool in understanding your practice or ASC.
Learn more about how SCA Health assists physician practices and centers with proper financial reporting visit our website at sca.health, and contact us to see how we can help you.
Resources
Netsuite: Netsuite.com
Becker’s ASC Review: https://www.beckersasc.com/asc-news/sca-health-optums-solid-start-to-2023-4-updates.html
