Many practice owners have already made the conversion of their manual or desktop accounting records to cloud-based accounting software, and are now starting to reap the efficiencies and benefits of real -time financial information at their fingertips.
Gone are the days of delivering the practice year-end books and records to the accountant to prepare the accounts as cloud accounting enables a collaborative 24/7 approach with the accountant. From the year-end accounts, you will of course know the overall net profit of the practice, but you will not be receiving an explanation and understanding as to the real underlying performance of the practice.
With the significant reporting and tracking capabilities of a cloud-based accounting software that links in with the practice’s own practice management software, it allows for the setting up of key financial performance indicators that can quickly and easily highlight where the practice could become more efficient. It can also help identify key areas for development and change, which once addressed can result in an improved overall bottom line profit for the practice.
By tailoring the practice’s cloud accounting software to allocate and categorise each transaction into meaningful monthly financial reports which can then be used to help make ongoing informed decisions within the practice. For example, tracking income per hour per dentist, material and lab fees ratio to monitor waste or overstocking and if you have associates, it can also help the practice principal understand what overall profit contribution the associates are making to the general overheads of the practice.
It is clear that performance monitoring is a vital component to a practice’s success and embedding these within the practice’s financial routine by using cloud accounting to its full capabilities is key.
For more information please contact Mairi MacIver (firstname.lastname@example.org) or your usual AAB contact.