PRIVATE PRACTICE - Finance 101

This course was recorded in 2015 | Free to APTA Private Practice Members!

Finance 101 will provide you with skills and tools necessary to improve your understanding of the financial issues impacting your practice. The seven modules provide a solid footing for non-financial people to gain improved understanding of financial statements and how to use them to benefit your practice. At the conclusion of this series you will have a solid understanding of the basics of financial principles, financial statements and how to utilize them to improve your business.

Module 1: Setting the Stage - The opening module provides an overview of the course and introduces key terms and concepts. The three key financial statements and their interaction is discussed. The concept of KPI’s (Key Performance Indicators) is introduced along with some common examples including charts. The importance of a written business plan and budget are discussed.

Module 2: Finance for Non-Financial People - This module goes into more depth on key financial terms and cash vs. accrual accounting. Discusses performing bookkeeping by using financial software to track income, expenses, profit and EBITDA. The difference between managerial and tax accounting is explained. Examples of cash vs. accrual accounting are included for income and expenses. A recommended chart of accounts is explained, allowing a collapsed or expanded view of the financial statements using a managerial accounting concept designed to assist in making evidence based decisions to manage the business. The relationship between the income statement (profit and loss), balance sheet and statement of cash flows is explained.

Module 3: Financial Statements - This module goes in depth into financial statements including how to use them to improve business decisions on a consistent basis. Discussed why it is critical to track expenses in key categories. Examples of collapsed and expanded views of the financial statements and how you can use them to manage your practice are presented. Reviewed a variety of profit and loss statements including previous year comparisons and actual vs. budget comparisons designed to help you manage your business. A discussion of common “expenses or cash disbursements” that are not included on your profit and loss, but rather show up on your balance sheet or statement of cash flows and why.

Module 4: Using Finance in Your Practice - Once you have a better understanding of key financial terms it’s time to apply that knowledge to managing your practice. Types of legal entities and accounting method are covered. Developing and implementing a budget is explained. A recommended method of reviewing the profit and loss statement in various forms is discussed, including why you look at it in different ways. A few methods for predicting income are presented. Concepts for tracking expenses, including using classes for multiple locations, are discussed. The importance of knowing your cost to provide services and using that information to determine which contracts you should sign is emphasized. The concepts of time value of money, present and future value, and key financial ratios are introduced.

Module 5: Bringing It All Together - This module focuses on reporting and using the information to manage your practice. Key metrics are discussed and how to use them. The key is finding the “right numbers” for your business. Frequency of review for various metrics is discussed. Looking at metrics over time to spot trends is important to help improve the business.

Module 6: Real Life Questions - The presenters will discuss a number of common questions that both have heard over the years. This Module may well contain the question you are waiting to ask. Options for handling issues with multiple locations using classes is discussed. There is a wonderful discussion about signing contracts below your cost for volume or public relations purposes, or if you have unused capacity. Additional topics include management compensation and maximizing profit by tweaking income and expense.

Module 7: How To and Tools - This Module provides a number of tools you can use in your practice. How to select an accountant, bookkeeper and choosing financial software are discussed. A template company file for QuickBooks Desktop version is provided and can be used if you are starting from scratch. Various Excel files are available for budgeting, dashboards, etc… A number of PDF files are included with examples, articles and helpful information.

Course Instructions

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