How Often Should You Review Financial Statements
At Synapse Accounting & Bookkeeping, we believe that healthcare providers must assess their profitability, growth potential, and financial stability through financial statement reviews.Most importantly, this blog aims to share the importance of reviewing financial statements and how often you should do it. Generate good returns on investment with the help of our expert medical accountants by contacting us today.
Importance of Reviewing Your Financial Statements
As the end of the year is approaching, reading and understanding a financial statement is an important task to ensure you’re all set for next year. While this process is generally reserved for your accountant or virtual chief financial officer, taking a second look is crucial. Looking through your profit and loss statement to your balance sheet and cash flow statement can determine your continued success and future growth. The following are important reasons why you should review your financial statements.
- You can verify your transactions: Part of reviewing your financial statements involves checking your bank and credit card statements. Since payments are posted on your accounts, you can verify whether transactions were doubled or were truly from the right patient. This increases your financial integrity and fosters a culture of transparency and accuracy.
- You can get alerted of future major issues: Reviewing your financial statements allows you to see the pattern of your cash flow and identify potential financial risks. You’ll be able to be on top of your accounts payables and receivables while closely monitoring your profit margin to proactively pinpoint what areas of your business are performing well, and which require improvement.
- You can see if you’re in the right direction to achieving your goals: Are you bringing enough revenue compared to your expenses? Is your revenue increasing, decreasing, or holding steady from month to month? These are some of the important questions that can be answered when you review your financial statements. As a result, you can predict what changes you can make to improve and reach your revenue goals.
You can prepare for tax planning: Physicians often think that tax planning should be at the end of the year. However, the truth is, that tax planning is an ongoing process that spans throughout the year. By reviewing your financial statements, you can re-evaluate your tax strategy and prepare for when you put together your tax returns.
Financial Statements: How Often Should You Review?
Typically, clinics fall into the habit of understanding their financial statements once a year. Some healthcare practices do their accounting quarterly or yearly, but this doesn’t accurately illustrate your growth, profits, and losses. It’s more than just information you need to check with your accountant at one point. Instead, financial statements reveal your fiscal health and need to be reviewed monthly according to Princeton University (Financial Review and Monitoring, 2019).
Regular financial review of activity helps identify significant budget variances, errors, and future compliance issues. In this way, transactions are accurate and appropriate, providing an important check that funds are used appropriately to achieve your practice’s objectives. At Synapse, we ensure that you can provide the best care for patients while gaining essential insights into your financial statements: Cutting the jargon out and turning complicated reviews into simple and comprehensible ones.
Our expert team works directly with your accounting staff and finance team to demonstrate the results of your practice’s operations. We are keen on ensuring that you have the valuable information that monitors performance and determines optimal strategies, investments, and modifications for continued growth. To discover how we can review your financial statements, you may contact us at (844) 384 7532 or medicalsales@synhs.com.