Finding financial flow and investment support to ease the pressure on medical practitioners
By Coenie Smith, Head of Private Clients for Medical Professionals at Nedbank
Medical practitioners face the same financial pressure points as every other profession, for example managing legacy study debt, intense workloads and societal expectations, often without the financial support or understanding that they need to navigate these complexities effectively.
On the other hand, more established doctors have to manage the challenges of establishing a business, having medical malpractice insurance, as well as managing their practice, employees and financial administration. The challenge for medical practitioners is to find a balance between the costs and complexities of running a business and being a doctor, which is not a typical nine-to-five job.
Setting up and managing a medical practice are different to how it’s done for most businesses. For one, there’s the initial investment into medical equipment and supplies that comes at a high price and puts an immediate financial burden on the practice. Most supplies, such as test kits, bandages, gloves, syringes and medication must be replenished regularly to ensure consistent patient care, which means that the business must always have access to liquidity to remain stable and functional. For most practitioners, starting their own business is a daunting process, as they make financial decisions that can have long-term implications.
Besides managing their intense and challenging day job, running a practice includes navigating debt, expenses, administration, taxes and more. This is even before they open their doors to start practising or hire their first employee. They need to know what salaries to pay, stay ahead of pay-as-you-earn tax and value-added tax, remain abreast of all sundries and expenses, and ensure that funds are managed tightly all the time. This is a significant administration burden for a profession that’s already battling with burnout due to the long hours that doctors work.
The first step towards managing finances more effectively and ensuring that financial decision-making is sound and aligned with expectations, is to partner with experienced financial professionals who have an innate understanding of the sector and its challenges. That will ease the pressure on financial planning, wealth management and investment, as the intricacies of finance will be taken on by an experienced relationship banker who can provide trusted insights and support.
Considering how capital intensive starting and running a medical practice can be, the next steps are to have a clear strategic vision that outlines the goals of the practice and to determine the market and financial expectations. Alongside the expertise provided by a relationship banker, this will help refine how medical professionals approach funding and choose the funding instruments that will best suit their objectives. This is also the right time to create a clear breakdown of medical processes within the practice so that costs can be tightened every step of the way. That will enable the practice to retain a firm hold on expenses while gaining visibility into its financial expectations.
Once they know what their practice needs are, it’s easier to assess its long-term financial needs and to refine finances accordingly. These are not the only costs of course, but they are line items that must be managed accurately to ensure that expenditure doesn’t spiral unnecessarily. Medical practitioners must also factor in additional expenses, including the following: medical-billing software that’s compliant with the Protection of Personal Information Act and medical regulations; an electronic medical records system that’s accessible and secure; telemedicine software to support remote healthcare; medical practice management technology and software; and insurance that spans from medical malpractice and business insurance to health and worker’s compensation.
This is not a simple process, and while it will be supported by the advice of a relationship banker or other medical practitioners who may be entering into the practice as a partnership, it is always going to be a time-consuming learning curve. After every one of these boxes has been ticked and assessed, medical practitioners must then determine which financial investment option is best suited to their business, which financial support will be most relevant to their expenditure, and so much more.
Expert financial advice and guidance will make this task easier, which is why Private Clients from Nedbank has a dedicated financial advisory for medical practitioners. This service provides medical professionals who have their own practice with access to qualified and experienced advisors who have insights into the financial and business needs of medical practices, along with 24/7 access to a relationship banker who understands the options and what’s needed to get things moving smoothly.
Having access to a dedicated relationship banker and financial tools is invaluable. It takes the pressure off medical practitioners as they set out to build their careers and future and eases the financial burden significantly. A relationship banker can source preferential investment rates, help develop financial management strategies, and assist medical practitioners over many of the hurdles that come with business, medicine and the post-pandemic climate, whether they are starting a medical practice or investing in new equipment or premises.
Visit our website at https://private-clients.nedbank.co.za/home.html to find out more.