Are you considering starting your own private practice? Congratulations! However, you may not be aware of the effort required to make it a success. In this series of posts, I will describe all of the non-clinical tasks I do in my practice and approximately how much effort each task requires. Be sure to follow this series to get to the grand total!
Running a successful practice takes a lot more than just getting clients. Sure, marketing is a huge part, but there are a lot of rather mundane tasks that need to be accomplished to keep a practice running smoothly:
Financial Tasks
- Collect fees. This isn’t as simple as you might think. Sometimes the credit card doesn’t go through or the check bounces. You must keep track of missing payments and re-bill the client. Also, if you accept insurance you must track all of your claims and follow up with the ones that aren’t paid. Sometimes insurance companies deny claims or actually lose them. I estimate this takes me about 4 hours a month.
- Billing Insurance. This includes getting the authorization, setting up the account, collecting the copay and submitting the claim. Total time per month: about 5 hours per month.
- Balance your accounts. Your company checking account, credit card bill and savings account (if you have one) must be balanced monthly, just as you do in your personal life. I estimate this takes me about 2 hours a month.
- Sublease. If you sublease as I do, you must pay sales tax on the rent you collect. (I am in Florida; this may not be true for other states.) I file electronically and this takes me about 15 minutes per month.
- Payroll. If you decide to do your own payroll, you must compute and pay federal tax, social security and medicare both for your business and personally. In some states you must also pay state income tax. I estimate this takes me about a half hour per month.
- Taxes. This is the only financial task I outsource, so can’t give you a time estimate. To give you an idea of the cost, I pay approximately $1,200 per year for both my quarterly and end of year tax filings. I estimate I spend about an hour per year collecting information for my accountant.
- Sunbiz. In Florida, where I reside, you must have your corporation listed on Sunbiz. You must renew this each year, as well as filing your annual meeting notes. (Again, this can vary by state.) I estimate this takes me about an hour per year.
Total time per month on financial tasks: about 12 hours.
Tune in next week where we will continue counting our hours…
Yours in the Joy of Knowledge,
Dr. Barb LoFrisco
