Cash Flow: Your Practice's Circulatory System

Think of cash flow as the circulatory system of your practice.

When everything is flowing smoothly, our bodies are functioning well.

When one area gets blocked, it needs immediate attention.

Run a statement of cash flow report regularly to ensure your cash is flowing smoothly throughout your practice.

According to Instamed, 30% of the patients pay the "average healthcare bill" directly.

What about the remaining 70%?

Patients are also putting their medical bills at the bottom of their "bills to pay" pile. This only adds to the slow of cash flow.

How can you, as a practice, get your cash faster?

How can you use this improved efficiency to improve your patients' experience?

Let's dive in -

Reading Your Cashflow Statement

It's not a crystal ball, but it can be pretty tricky at first!

Your statement is broken into these three categories to make it easy to see how cash has been allocated.

There are 3 major areas of your cash flow statement:


  • Revenues

  • Operating Expenses

  • Salaries

Operating cash is anything that comes in or out in direct relation to your business operations. Need to pay an employee? That's an operating expense. Make a big sale? That's an operating revenue.


  • Purchasing Land or Equipment

Chances are, you may not see investing come up often on your cash flow statement. Purchasing new tech for your practice? That's investing. Purchasing your dream office? That's investing.


  • Repaying Loans

  • Paying Dividends to Investors

  • Borrowing Funds

If you're receiving cash in or sending it out to get a loan or repay a loan, it's under this category.

Improving Your Cashflow

Now that you know about your cashflow statement, you might be thinking "WOAH - I gotta make a change!"

Here are a few ways you can improve your cashflow for your practice:

Negotiating with Insurance Companies

Did you know you can do this?

If you don't want to, Adam Kae offers negotiation services on your behalf!

Think about ways to get better rates or faster claims, so your cash flows more efficiently.

Rent vs Buy

Thinking about the "investment" category, are you buying when you could be renting equipment?

Renting has perks such as free tuneups and easy return when you want to upgrade!

Not sure if this is the right path? Let's have a quick 1-on-1 to talk about what rent vs buy options are right for your practice.


We talked all about dumping your insurance companies in a recent blog, but have you truly considered this path for your practice?

If cash-based isn't an option, could you offer alternative methods of payment to insurance?

Revenue Cycle Management

Use revenue cycle management to gain clarity of how revenue circulates throughout your practice. It will also improve your overall cash flow efficiency.


Cash flow isn't something to take lightly when it comes to your practice's finances.

It's more than running a report - can you build a strategy from the numbers?

Tell us - what tools do you use to manage your cashflow?



5 Tips for Managing the Cash Flow of Your Medical Practice

How Are You Managing Your Medical Practice Cash Flow?

How One Medical Practice Overcame Cash Flow Problems

Stabilize Cash Flow with Effective Revenue Cycle Management

Financing and cash flow management for the medical group practice

2020 Medical Billing Statistics


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Disclaimer: This article contains information and opinions from Adam Kae & Associates, and the information and opinions should not necessarily be seen as the best possible solutions for your business. Please contact us at to help you find the best solutions for your business.

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