There are three important things to remember when running a small business in a medical practice: cash, cash and cash. One of the best ways to manage your cash so you have what you need when you need it is to set up a plan, perhaps on a weekly basis, of how you are going to manage your cash and how you are going to use it.

You look at cash which is available and how it is spent. Look at cash which is expected to come in during the week. Third of all, you look at cash which needs to be reserved. You will have payroll-tax deposits to be made, you have payroll coming up, you might have a major lease payment. These kinds of things, you need to reserve money for so you do not spend it and you will have it when you need it.

Then you can budget for how much payable you are going to spend each week. Just because the bill came in the mail does not mean you have to pay for it right away. But you do want to pay for it within 30 days or less so make sure you keep it current. Sometimes companies will offer you a discount if you pay in a shorter period of time, 30 days, sometimes 10 days and very often it is effective for you to make those payments and take advantages of those shortcuts. So set up a worksheet. Personally, I could do it about a Wednesday or Thursday of the week. Sit down on a Wednesday; figure out how much cash I have on hand in the bank. Figure out how much I probably will take in on Thursday and Friday, between insurance checks and cash or payments which come over the transom. Then I figure out how much additional I have to reserve and then I know how much I have left over for payrolls. And then make a decision. How much are you going to pay this week? What needs to be paid because the due date is coming up and what is going to come up in the next week? I want to make sure I get those out of the way as much as possible. And then cut the checks on Thursday, have them reviewed and signed, Friday we put them in the mail.

That works out to be a pretty cash plan. It is also a good idea to set up an unsecured line of credit with your bank. Typically, this will be no cost or very low cost. It could be small amounts of money, ten thousand dollars, twenty thousand dollars. It is not secured against any equipment but it enables you to take a loan if you are in a very urgent situation. It is good protection for the practice. It helps establish your credit and it is part of a good financial plan to manage your cash, your cash and your cash.