By Bradley Woolridge, Director at Burns Acutt
Choosing a single system out of all the accounting systems available today, can seem daunting for any medical professional.
Medical practitioners generally have little knowledge or experience regarding their choice of financial management system and which would be the most effective for their practice.
They also tend not to be adept at the setting up, management, and day-to-day control operations of accounting systems. This is completely understandable. Invoicing is generally taken care of through the use of specialised healthcare financial systems. These cater well for the kind of detail required from medical aids so any medical professional with his own practice should not work without one.
The issue with these specialised systems, however, is they are generally not integrated, and therefore do not allow for comprehensive accounting and tax functionality.
In order to maximise control over your finances, it is important to implement a financial management system into your practice. This will also save you a lot of money on accounting and tax services in the long run. Some of the more popular systems available include Pastel, Quickbooks and Sage, although each one comes with its own pros and cons. This also applies to any cloud-based system, such as Xero, which is currently gaining a lot of traction as one of the most easy-to-use intelligent financial systems on the market.
The key questions to consider when comparing accounting systems are:
1. What do I want out of the system?
2. How do I make it work with my existing data and systems?
3. Can I afford it?
Let’s have a look at the first two questions, and perhaps I can help alleviate some of the concerns you may have.
WHAT DO I NEED?
To answer the first question, I would advise that you choose one of the integrated financial systems that is compatible with your payroll system, since your payroll system is likely your biggest expense and most complex area to manage. The second most important feature to look for is usability. Look for a system that can, at the click of a button, tell you exactly what costs you are incurring, what your revenue trends are, and what your current and projected profit is.
If your chosen financial management system includes the above functionality, it will empower you to make the right decisions, while also preparing you for imminent large cash outflows, such as tax, creditor payments or bonuses.
HOW DO I INTEGRATE IT?
In order to integrate your new business accounting system, you need to capture all of your existing transactions into it. You can do this either manually or by importing the data, which will not only save you time, but eradicate the possibility of human error. Once the new data is in place, you will need to confirm fund allocations. Once this is accurate, you will be able to do financial projections based on your knowledge of the business as well as current trends and run rates.
Although this might seem initially complicated and time consuming, I can assure you accounting systems are not only fundamental to running an administratively strong business, but well worth the rewards you can gain from them.
An alternative way to tackle this daunting task, would be to first partner with an accounting and tax services provider, and let them help you choose a system. Surrounding yourself with the necessary skills at a reasonable fee, will make this part of the process much less daunting for you.
If you bring your accounting and taxation services provider on board, they can take away some of the burden of control from you, while supplying you only the information you need in order to make empowered decisions.
The beauty of technology is that information can be shared through the cloud, which will allow you and accounting services provider to work on your finances together, in real time. With changes in data reflecting almost instantaneously, you will be able to rest assured that you are always making the best decisions for your business based on the most current information available.
So although the ultimate choice between accounting systems is up to you, it will greatly benefit you if you let this decision be guided by your accounting services provider. A good accounting services provider will have strong financial knowledge, to best advise you on any fiscal business decision.