Running your own healthcare practice involves making many crucial decisions, including selecting the right accounting firm. An experienced accounting firm will give you the support and 1:1 attention you need, realizing that no two business owners and no two medical practices are the same.
Today we’re going to examine the top 10 questions you should ask prospective accountants to help vet the right accounting firm for your practice.
1.Do you have any experience with healthcare clients or other medical practices?
Every healthcare client and practice has unique needs and challenges, which is why it’s important to find an accounting firm that has worked extensively with clients similar to you.
2. How large is your accounting team?
The right accounting firm is one large enough to have a team with a wide range of expertise to meet your diverse needs, but that – like Zeifmans – still gives you the 1:1 attention necessary.
3.What do you know about complex/innovative organizational structures?
Structuring your healthcare practice in a way that sets it up for future growth is a must. There are several ways you can do this, and the right accounting firm will have experience with all of them.
Options for structuring your practice include:
As the name implies, a sole proprietorship is a business you start yourself. A simple way to start a business, there is little in the way of costs or paperwork, and you pay personal income tax on net income. There are risks to a sole proprietorship though. You assume all the risk running your business this way, and that risk extends to your personal assets.
As businesses grow, sometimes it makes sense to bring in a partner. As in a sole proprietorship, a partnership still exposes everyone involved to personal risk. However, the risk is now shared between two or more individuals – as are any rewards. Partnerships usually involve signing a contract that explicitly lays out the rights and obligations of each partner.
Unlike the previous two options, forming a corporation separates the business from its owners. This means the liability of the business owner(s) is limited to what they’ve invested in the company – their personal assets are not at risk.
4.Can you advise on structuring investments outside my practice?
Any firm worth its salt will guide and advise you in all aspects of money management, not just the ones related to your business. It is impossible to know what the future holds, which is why it’s important to plan for your long-term financial security.
The right firm takes the time to get to know you and your unique needs and circumstances. The right firm will provide you with an honest assessment of your financial situation and share customized recommendations for protecting and preserving your wealth.
5.What other services does your firm provide?
Ideally, your accounting firm of choice will have expertise in a range of areas. You will rarely have only a single accounting need, which is why it is advisable to find a “one-stop-shop” with a depth of experience.
The ideal firm will have extensive succession planning and cross-border/international tax knowledge.
As a business owner, it is important that you have a succession plan in place – whether that be passing it on to a family member or selling it to a third party. Whatever you decide, there are different tax and financial implications for each. A trusted advisor will take the time to break down what those implications are.
Succession planning can be stressful and emotional. The ideal advisor understands this and will ensure you understand the benefits and potential pitfalls no matter what you decide.
Cross-border and international tax
Conducting cross-border business is becoming more common, including for smaller companies. With this comes a host of rules and regulations that small business owners likely don’t have the time to go through on their own.
With Zeifmans on your side, you can rest assured that we have your cross-border business needs covered.
6.When should I set up my succession plan?
Succession planning is the process of selecting potential successors for a business. It is never too early to begin setting up a succession plan, as it is an ongoing process that you will likely revisit many times throughout your medical career.
7.How do I purchase a healthcare practice or expand my current one?
Expanding your currentpractice or buying one is a decision that requires careful thinking and planning. Some of the factors you should consider are:
- Operational costs – have they gone up during the COVID-19 pandemic?
- How much do you know about running a business or expanding one?
- If purchasing a practice, do you know the team and enjoy working with them?
- Do you have the finances (or funding) to buy/grow a practice?
Before making a decision, your best bet is to speak with a trusted financial advisor.
8.Is it better to own or lease office space and medical equipment?
Renting vs. buying is a question many business owners grapple with. Each has its pros and cons and there is no one-size-fits-all answer. Whether to rent or buy equipment and office space depends on your individual circumstances.
For instance, if you are just starting your healthcare practice under the sole proprietorship model, leasing may be the way to go – at least in the beginning. As we mentioned in question three, you assume all the risks of running your business as a sole proprietorship. Signing a one or two-year lease ultimately exposes you to less risk than taking on a 10 to 15-year mortgage.
With a new business, it is also hard to predict where you will be in a year or if your practice is going to grow. Leasing provides flexibility to expand your business, makes it easier to relocate, and, in the case of equipment, ensures your practice is equipped with up-to-date technology.
If you have an established practice, are confident in your growth projections and have stable working capital, then owning may be right for you. The Zeifmans team can help you figure out which option is best.
9.How should I manage cash flow?
For this, you’ll want to get an accountant involved in the early stages of setting up your practice. They’ll be able to help you put together a budget and estimate your cash flow for at least a year. Your business plan should also include financials, including your projected cash flow – income, expenses, and revenue.
10.What type of engagement do I need?
Accountants offer various types of engagements (year-end services offered to clients), and the one that’s right for you depends on the needs of your healthcare practice. The types of engagements are compilation, review, and audit.
A compilation engagement is the most basic of the three. Here, information is compiled into financial statements using information from the client. Assurance is not provided.
A review engagement provides more assurance than a compilation, but it is still limited. Essentially, with a review engagement, the only assurance your accountant provides is that nothing indicates your financial information goes against Canada’s accounting standards.
Finally, the audit. Audits give clients “reasonable assurance” that their financial statements comply with Canadian accounting standards. Complete assurance is never possible regardless of the type of engagement you choose, but audits are your best bet.
Experts in healthcare
Starting or growing your medical practice is an exciting venture. It is important to have the right advisors by your side, including an expert accounting team. As an entrepreneur, you can take comfort knowing that Zeifmans has worked with those in healthcare for more than 60 years.
Give us a call today and we’ll work with you to determine how to make your practice a success.