I have long contended that managers develop a “gut feel” for certain aspects of their organization – the mood, the culture, and even the spending. Michael Young, the new CEO of Atlanta’s troubled public
The payments were proper, in that there was a need, a service was rendered and the vendor should be paid. But one item, $100,000 in fees to temp agencies (for one week), jumped out, and resulted in a review of operations in several departments. High temp costs, as with high overtime costs, beg the question – why not hire regular employees? He found that the hospital was sending patients out for cardiac caths – and ordered a new lab. One are he had previously announced he would focus on –the turn time between surgical cases, a tactic that had apparently worked well in his previous position at Erie County Medical Center, a public hospital in Buffalo, NY (Young apparently likes a challenge!)
In practices with a professional administrator, you are more likely to rely on routine revenue and expense reports, with a detailed print out of checks. In smaller practices, plan time for signing checks each week – build in a half hour into your schedule to sit down with the appropriate person, and look at what you are signing. Pretty quickly, you will develop a “gut feel” for the spending, what is usual and what is out of the ordinary. This is the time to ask questions, and ask people to get you answers.
The system that I’m describing does not replace the usual checks and balances for handling payables for your practice. This is a piece of that, but more importantly, it gives you the hands on feel for what it costs to run your business.