This is a big questions that a lot of soon-to-be direct primary care doctors have - what should I be getting out of my accountant or what questions should I be asking of my accountant when I start my direct primary care practice?
What Should I ask my accountant before I start my Direct Primary Care Practice?
First of all, congrats on starting your direct primary care practice! When you first meet with your accountant, make sure that you trust them and make sure that they’ve worked with similar businesses in the past. There’s nothing worse than an accountant that sees you as a dollar sign.
Next, you can find out what your accountant prefers in terms of everyday tools that you’ll need to be successful. For example, you could ask your accountant how they intend to manage your profit and loss sheets. You can also ask them how to manage your payroll services. You can also ask your accountant if they’ve had experience in helping doctors get funding for their direct primary care practices. All of these will help you pick an excellent accountant.
What is an Employer Identification Number (EIN) and why do I need one for my Direct Primary Care practice?
Before you meet with your accountant, you should probably register your business with your State so that you can get an EIN. According to Wikipedia: “The Employer Identification Number (EIN), also known as the Federal Employer Identification Number (FEIN) or the Federal Tax Identification Number, is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to business entities operating in the United States for the purposes of identification.”
The EIN is important for you because you’ll need this number to set up a bank account for your business. Once you have a business bank account, you can transfer money into this account and then start making purchases through your business bank account. This will help you to build credit in your business and help you to become eligible for a loan in the future.
Which Accounting Software Should I Use for my Direct Primary Care practice?
When you meet with your accountant, you should definitely discuss accounting software. There are a few options out there in the marketplace, but I currently use and enjoy using Quickbooks by Intuit. Quickbooks is about $70 monthly and it shows you how much money you’re bringing in or your profit and how much money your spending on your business or your losses. These two elements and the charges therein comprise your profit and loss statement.
Personally, I check my profit and loss (P&L) statement everyday as it gives me a good idea on how well our business is performing. Every quarter, I review my P&L with my accountant and we discuss what’s going well and reconcile any ambiguous, erroneous, or duplicate charges.
If you don’t know your numbers and you give complete control of your profit and loss statement to your accountant, it will be hard for you to keep your finger on the pulse of your business. That’s why I recommend discussing these things up front when you first meet up.
Do I need a Payroll Company if I’m the Only Employee?
Usually you don’t need a payroll company if you’re the only employee in your direct primary care practice. Once you hire another doctor or a medical assistant, you’ll need to set up an account with a payroll company so that they can help you keep track of payroll taxes. If you’re a solo doc and if you have an accounting software like Quickbooks, you can pay yourself through an owner’s draw. This is a simple way of paying yourself when you’re just starting out.
Other things to discuss with your accountant when starting a Direct Primary Care practice
There are so many other things you can discuss with your accountant when starting your direct primary care practice. Here’s a few other topics to broach:
How long have they been an accountant?
How long do they plan on continuing to practice accounting?
What kind of lending options or practice finance options they’re familiar with for medical startups?
Which payroll do they frequently work with and what are the pros and cons of using that payroll service?
Some banks have a strong practice finance division that could help fund your startup and find out if your accountant has worked with these banks in the past and understands the processes involved.
Find out which payroll company your accountant recommends and then compare that one to others like Gusto or Paychex to make sure you're getting a good/honest deal.
HOW CAN I LEARN MORE ABOUT STARTING A DIRECT PRIMARY CARE Practice?
If you enjoyed reading this blog post and if you want to learn more about starting and growing your direct primary care practice, look no further than our courses on how to start and grow your direct primary care practice. We at Startup DPC have begun compiling some of the best content available on this blog and in our courses.
The best place to start is to take our Direct Primary Care Business Plan course, available here. From there, you can learn how to attract new patients to your direct primary care practice and how to find the perfect location or build out the practice of your dreams.
Thanks for reading and watching, and best of luck in your direct primary care journey!
- Dr. Paul Thomas with Startup DPC