As owner of a practice, you should know "everything"

Question I am the sole proprietor of a busy medical practice with four employees, including an office manager. The practice seems to run smoothly. But my office manager and I never seem to get a chance to go over the numbers or other aspects of the practice unless we are trying to put out a fire. This is due in part to my busy schedule but also because the office manager seems reluctant for me to be any more involved than I am. What should my role be?

Answer: The answer to your question is easy: You are the owner and you should know everything.

"Everything" includes financial and operational information. It includes knowing your employees and understanding the practice's relationship with outside parties, including but not limited to your bank, accounting firm, third-party payers, payroll company and others.

You need to know this not only because it gives you a general sense of your practice's financial health. You also need to get this information to protect yourself against any employee who might be defrauding you or embezzling from the practice. It's a lot more difficult for someone to steal if you're watching the cookie jar.

The key is to gain and maintain this knowledge without being a micromanager, stifling the creativity and authority of your office manager and staff.

So let's talk about an approach to obtaining this information in an effective and efficient manner, so all of the key players in your practice are satisfied -- especially you.

Financial information Upon request or on his or her own, the owner of a physician practice should be able to access information such as bank account balance, deposits, status of accounts payable and accounts receivable, and net revenues.

In most instances, this information is not necessary to have on a daily basis. But the practice's cash flow situation might dictate the frequency in which it is appropriate to look at this information.

This information should be presented to the physician monthly or quarterly if cash flow is not an issue.

Operational information The owner of a medical practice should be able to have the following information at any time: daily charges, daily receipts, total accounts receivable, number of patients seen daily and current staff complement.

While daily reports aren't recommended, it is important to ask to see this information sporadically, so you might get an idea of how your practice is running on a daily basis. Once a month, this information should be presented to you in a comprehensive format.

Employees Get to know those who work for you. While it's not necessary or appropriate to delve into their personal lives, it is helpful to learn enough about them to understand their strengths and how they are best able to contribute to the practice.

This can be accomplished in a variety of ways: casual conversations at the office, office social functions, discussion with the office manager and review of performance evaluations. Individuals tend to be more loyal to employers who take an interest in them and work to build on their strengths.

Relationships with outside parties Typically, a business owner's relationships with advisers and other outside parties are strong during the startup phase of a practice and into the first six months.

If things are running smoothly, the primary communication between these outside parties and physician transfers to the office manager.

While the office manager has the practice's (and physician's) best interests in mind, that doesn't mean the manager can read the physician's mind. New ideas and opportunities to improve your practice and increase your bottom line often come from conversations with professionals not part of the daily operations, who have had experiences with other physicians and can bring a fresh outlook to the practice.

We recommend you talk with key advisers at least once a quarter.

Set up meeting times

There is other pertinent information of which the physician should be aware. This includes profitability of managed care contracts, status of equipment contracts and leases and fluctuations in key expenses. The office manager should prepare a monthly report packet and meet with the physician to review it.

The report packet should consist of only a few pages of information pertinent to the physician. The details supporting the reports should be maintained in a file (either online or in a file drawer) for reference.

This meeting should occur consistently on a predetermined day of the month, at a time when the physician and manager can discuss it without interruption.

Much of the information identified in this article could and should be discussed in a weekly meeting between the physician and office manager. The meeting should be on a consistent day and time of the week and should last no more than one hour.

At those meetings, the office manager will be able to show you key financial and operational indicators from the past week and also be able to discuss issues and concerns related to patients, employees and others that occurred during that time period.

In this way, you will accomplish several objectives. You will be able to have your finger on the pulse of your practice. You and your office manager will be able to have a specific time to focus on issues instead of trying to address them during the course of the day amid patients and daily activities.

And you will develop a stronger working relationship with your office manager, which is necessary to ensure the success of your practice.