Financial tips doctors should take before starting clinic

70% of all treatment decisions are based on pathology results, setting up a business in pathology is an extremely lucrative career option. If you’re on the path to starting your own pathology practice, here are 5 things that you should keep in mind. As Hemant Beniwal, Director of Ark Primary Services points out, “Starting out late and long erratic working hours do influence a doctor’s financial life. They don’t have much time to concentrate on planning their finances.'However, carefully planning your finances will go a long way in ensuring a smooth setup and functioning of your clinic. Follow these financial tips while setting up your clinic.

1. Buy A Clinic Management Software

How it helps?
When you are about to start a clinic, you need to factor in various day-to-day expenses such as:

• Procuring the required inventory for medicines
• Payment to vendors
• Staff salary
• Clinic maintenance and utilities

Deploying clinic management software will give you real-time updates on the expenses you incur and help you closely track your cash inflow and outgo. This software also helps in:

• Getting quicker access to patient's records
• Improves inter-department co-ordination
• Getting rid of volumes of paperwork that are difficult to maintain

Cost involved:
In fact, clinic management software has become one of the most vital aspects of operations. A software-based clinic management solution can cost you approximately Rs. 45 lakh. Business loan for doctors with loan amount of up to Rs. 55 lakh can help you with the capital required to install clinic management software.

2. Buy An Accounting Management Software

How it helps?
As a doctor, you need to pay taxes on your total profits. To avoid paying unnecessary taxes, interest, and penalties, it is advisable to maintain the following documents:

• Cashbook
• Journal
• Ledger
• Originals and photocopies of all the bills issued by you and the expenditure incurred
• Register with details of patients, treatment given, fees received
• Details of all the medicines, drugs and other consumables used
• Make sure the details entered are correct and up-to-date.

Cost involved:
Get GST-enabled accounting software to keep a track of your accounts. Such software costs approximately Rs. 6,000.

3. Buy an Indemnity Cover

How it helps?
Cases of medical negligence in India have gone up by 400% in the last decade. While doctors do their best to provide quality care to patients, even then they commit errors. According to Dr.Rakshay Shetty, a pediatric intensivist at Rainbow Hospitals, Bengaluru, 'Around 70% of deaths that occur due to medical negligence can be attributed to human errors.' In one of the most widely followed cases of medical negligence in India, the Supreme Court ordered the concerned hospital and doctors to pay a whopping compensation of nearly Rs. 6 crores to the victim.

When you start your clinic, a professional indemnity insurance plan is of paramount importance. Hemant says, 'Doctors require special insurance so that they can protect themselves if they are sued for negligence, malpractice or mistakes.' A Bajaj Finserv provides doctors indemnity up to Rs. 2 crore and protects them from any third-party or employee dishonesty or fraud, libel and slander and errors arising from errors, negligence or omission. The plan comes with quick processing and attractive premiums starting from Rs. 5000 annually.

4. Optimize Your Expenses

Spending heavily on lavish cabins, interior decoration, and others can take a toll on finances at the initial stage. For example, if you have Rs. 20 lakh as capital and you spend Rs. 8 lakh on costly interiors, furniture, and expensive servers, you will leave yourself a small amount to address other vital needs such as:

• Hiring qualified and trained staff
• Buying high-quality equipment
• Clinic rent and utilities
• Clinic supplies and medical materials
  

Cutting costs on unnecessary expenditure will help you address woes related to cash flow during the initial period.