Medical professionals are professionals that are in high demand. This means that they have to work hard and smart to succeed. One way they can do this is by finding the best financial solutions for their needs. This blog post will find out about the top financial solutions for medical professionals so you can get started right away!
1. Adding Ancillary Services
If you’re looking for a financial solution for your medical practice, it’s essential to consider all available options. While there are numerous choices out there, one category that you should explore is ancillary services. What exactly does this mean? Ancillary services take many different forms and can be especially beneficial for busy doctors who want to focus on their core competencies while still maximizing revenue potential at their practices.
What kinds of services can be considered as ancillary?
Some examples include lab work or diagnostic tests like ultrasounds or x-rays, physical therapy, wellness screenings, cosmetic procedures such as Botox injections or laser hair removal, orthopedic supplies like braces, crutches, and compression garments; durable medical equipment (DME), hearing aids and eyeglasses, and insurance verification. The fantastic thing about adding Healthcare Ancillary Services to your practice is that it can be a win-win situation for everyone involved. For example, earning more income from ancillary services helps you expand the range of products and services offered at the medical facility. This could translate to upgrading equipment, building new facilities, or hiring additional staff members, all great ways to grow as a business.
2. Accounts Receivable Factoring (ARF)
Accounts receivable factoring is a service offered by many financial institutions to access cash for invoices quickly. Unlike traditional loan or credit line products, which often require several weeks of perfect payment history and high FICO scores, ARF provides immediate liquidity with no personal guarantee required. While there are various terms and conditions associated with this type of product (such as the size limit on transactions), it can be an attractive option for businesses looking to grow but do not want the additional restrictions brought about through loans and lines of credit.
3. Create an Emergency Fund
Like any other business, medical professionals need to create an emergency fund.
An emergency fund is vital for everyone, but it’s especially critical when the income of a medical professional fluctuates throughout different seasons and years. It can be difficult to budget during all parts of the year because you never know if your practice will bring in more or less money this month than last month. An emergency fund allows self-employed individuals with variable incomes to have some degree of stability so that they don’t have to worry about being able to pay their bills every month.
4. Open up a Retirement Account
Having a retirement account is not just for those in the corporate world. There are plenty of benefits to be had by opening up a retirement account if you’re self-employed or working as an independent contractor. While there are many options to choose from, you must find the one which will bring maximum benefit.
Often self-employed individuals don’t take advantage of retirement accounts because they feel they can not afford to put away part of their income or do not know enough about them. The good news is that there are plenty of different types available, including traditional IRAs and Roth IRAS. A SEP IRA may be an option worth considering for those who prefer investing in stocks instead of mutual funds. And if you’re looking for something even more flexible than the options mentioned above, then look into opening up a solo 401(k) account. There truly is no shortage when it comes to financial solutions explicitly designed with medical professionals in mind.
In addition to choosing from a variety of options, the best part about opening up a self-employed retirement account is that you can contribute more than if you were working for someone else. For instance, an independent contractor or freelance professional can put away as much as 25% of his annual income into a solo 401(k) plan. At the same time, those who large companies employ have a maximum limit of $18,000 per year. With higher contribution limits and plenty of investment opportunities available, it’s no wonder why so many medical professionals take advantage of these plans when they start their business ventures.
5. Take Advantage of Tax Benefits that Come with Being a Medical Professional
Being a medical professional means that you are doing work that is vital to society. You improve lives daily, and the world would not be able to function without your contributions. This should make you feel proud of what you do, but it also means extra benefits are available because of this critical role in our community.
Tax Deductions for Doctors Taxpayers have certain expenses related to being self-employed employees instead of receiving an income through traditional employment pathways. For example, as a doctor, you may need to hire an assistant to complete the administrative work that takes up too much of your time. This person is considered self-employed and must pay their taxes. They cannot be listed on your tax return because they are not employed by you, even though they perform services for you at least 40 hours per week.
The healthcare industry is constantly evolving, and the way medical professionals manage their finances must also evolve. The most important thing to remember when choosing a financial solution is offering benefits specifically tailored for your situation.
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