Last month, I opened a quick survey to try to learn more about the "state of pediatric bookkeeping." This quote from the survey describes how most of you feel:
I don't understand any of it and feel at such a loss relying on other people!
I just want to practice medicine :(
I routinely consult for pediatricians, which leads to questions about the practice overhead or partner salaries vs. profit payments. I am then often confronted by their inability to easily provide me with accurate data. I know that my friends, like Paul Vanchiere, report the same scenarios to me and when he does his virtual CFO work, the first thing he seems to do is straighten up each practice's bookkeeping.
My goal with this survey is to explore developing some options for my clients when they need a better solution. I'm still working on it (with Paul and other friends), but I thought I'd share the results in the meantime.
Let's start by looking at who responded to the survey. I like to start with an understanding of the quality of the sample:
- 73 responses from 26 different states. Leading states by volume include TX and CA (8), VA and PA (6), and then a broad scatter.
- The average practice size was 7.5 clinicians, median 6.0 - however, nearly 1/3 of the respondents have 4 clinicians or fewer.
- Average practice locations was 1.8 - nearly half the respondents had 2 or more locations (what's up with that?).
- How many W2 employees do you have?
This is easier to display in a quick chart:
1 - 10 21.92% 11 - 20 24.66% 21 - 30 12.33% 31 - 40 10.96% 41 - 50 15.07% 51 - 60 8.22% 61 - 70 2.74% 91+ 4.11%
All around, a decent sample though it looks a bit larger and more sophisticated than the average independent practice. Let's see what that means for results.
Let me jump to the punch line. I'm looking for patterns. And one of the first things I wondered is: who are the practices most dissatisfied with their bookkeeping? From the initial findings...no pattern. Not size, not location, not physicians. Bigger practices are not more or less satisfied. Let's look at other results and then come back to this pattern.
On a scale of 1-7, practices scored themselves an average 5.1 for optimization of bookkeeping. In other words, most of you feel decently optimized - 78% of you scored yourselves a 5 or higher and 11% scored yourselves a 3 or lower.
When it comes to satisfaction, meanwhile, you averaged a 3.8/5 - 70% at a 4 or higher, 12% at 2 or lower.
The implication of these scores is that most of you feel like your bookkeeping is in good hands. Not all of you, of course, but most. I'm beginning to wonder if there is a relationship between who calls me for consulting and whether or not their bookkeeping is solid.
Let's dig into the other results.
What accounting software are you currently using?
Nearly everyone is using either Quickbooks Online (>50%) or Desktop (>33%). A small handful are using Sage Inacct. No distinct impact on satisfaction.
How many bank or credit card accounts does the practice have?
2/3s of you have 1-3 business credit cards, just under 1/3 have 4-6, and a few of you have 7+. It's not the big practices with a lot of cards, either! The number of credit cards you need to track and balance adds to bookkeeping overhead.
How many bills do you pay each month?
29% pay 1-25, 38% pay 26-50, 22% pay 51-75, and ~11% pay 75 bills or more. Again, not particularly attributable to size or satisfaction. Obviously, the more bills you need to pay, the more bookkeeping services you need.
Who at the practice approves bill payments?
Roughly 40-45% of you have the practice manager/administrator/etc. approve the bills. 37% have the practice owner approve the bills. And 19% of you have multiple approvers. In my world, unless you are a solo practice...you need multiple approvers. This is where nearly all of the fraud and embezzlement happens. I have to admit that I was surprised by how many practices depend on their managers to approve payments.
What payroll platform are you currently using?
Paychex and Quickbooks make up 35-40% of your business, but the most common answer was...Other. Lots of local, individual answers. 2 of you don't use a payroll system at all!
Do you file any 1099s?
80% of you do, 20% of you don't.
How often do you pay your employees?
90% simply pay biweekly. Just under 10% pay semi-monthly.
On average, how much time do you spend on bookkeeping related tasks each week? (including payroll and bill pay)
|1 - 2 hours||26.03%|
|3 - 5 hours||32.88%|
|6 - 8 hours||16.44%|
|I don't know||8.22%|
Interestingly, I don't see a real pattern between the amount of time spent on bookkeeping and satisfaction. And not much time related to the size of the practice, either.
What are your biggest bookkeeping challenges?
Although a number of you indicated that you don't have any challenges - a few even said, "I love it!" - nearly half of you said that analyzing your standard reports and matching/categorizing were your biggest challenges. Account reconciliation is also a pain, but paying bills and payroll aren't problems for 80% or more of you.
And now for the big question:
Approximately how much do you pay for your bookkeeping services (not payroll or accounting)?
It's challenging to quantify this one because the answers vary so broadly. We have everything from "my husband does it, so it's free" to $150,000 a year! It looks like the most common answer from most of you is that it's built into someone's duties at your office as a part of a position. It's also a challenge to distinguish bookkeeping duties from accounting work, as they are often blended. I want to dig into this more!
So there we have it. I hope this insight helps someone. I might have some more news for you later...