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Is my CPA on my side?

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  • Is my CPA on my side?

    I am part of a small group practice of six surgeons. I recently made partner and feel as though my reimbursement in our eat what you kill model is unrealistically low given my production. (I understand probably all young partners tend to feel this way).

    My question is: My accountant is also the practices’s accountant. Does he have a legal/fiduciary/ethical obligation to tell me if there is something unfair about our reimbursement model if I ask him? Given that he knows the exact workings of our collections and of how our profits are dispersed it would seem that he would understand it best. I worry that if push comes to shove he would have the bigger fish( the practice) best interests in mind over mine. Thanks in advance for any replies.


  • #2
    I too am in a small group practice. At our quarterly meeting the accountant shows us each our own collections. Do you know your collections?

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    • #3
      Since you're partner, you should have access to the books. I'd ask your CPA to sit down and show you all the details.

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      • #4
        You're a partner, why don't you just ask to see the books?

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        • #5
          He works for YOU.

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          • #6
            i think you are too focused on the issue troubling you.  hopefully you like and respect your new partners.  if so, there should be no problems with you meeting with the CPA and learning how the practice functions.  The question isn't really am I personally getting shafted.   the question is how is the money that comes in allocated?  from there, you can learn if there are things you might do to optimize your balance between time, income, responsibilities, etc.  it is highly unlikely they are purposefully screwing you.  and if they are, better to find out now and leave sooner.

            there are intermediate steps you can take if you still feel concerned.  talk to the partners and find out their tips for optimizing income.   volunteer to help with running some of the administrative functions that will naturally cause you to spend time with the CPA.  either way, the CPA works for the partnership and as an owner, for you.  it won't take long to figure out if there are shenanigans.

            how do you measure productivity?  how do you compare collections with productivity.  I remember one of my med school classmates had joined a practice where the first two years all the partners shunted uninsured patients to him since he was on a salary.  well he still had all those patients when he was on productivity filling his appointment calendar.  so even though he saw a lot of patients, his collections did not reflect his effort.  are there administrative stipends?  do certain partners own the building?  is there call pay?  is the overhead unreasonable?  do any of the partners families work for the practice?   some practices subsidize cars for certain partners.  lots and lots of different compensation models out there.

            good luck.

             

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            • #7
              Talk to the CPA.  The allocation of overhead is very important and I think under-appreciated.  The first practice that I was in very much allocated the overhead to the Senior partners advantage to the detriment of the younger docs.  You should understand this.

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              • #8




                Talk to the CPA.  The allocation of overhead is very important and I think under-appreciated.  The first practice that I was in very much allocated the overhead to the Senior partners advantage to the detriment of the younger docs.  You should understand this.
                Click to expand...


                This is a great point and something I too learned in a partnership.

                Do you split costs evenly or as a proportion of income?  In our group some things we split evenly but some things as a proportion (ie often the busiest partners are also taking up more resources/nursing/supplies, etc so it makes sense that some costs are divided up as a proportion of revenue rather than just split evenly).  You need to get an idea from your clinical and non-clinical staff if they are spending a lot of time working with/for one partner over the other.  Is one doc monopolizing a mid-level but you are paying an equal cut of their salary, etc.

                These are all things that you'll need to assess after you sit down with the CPA.

                 

                 

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                • #9
                  The client is the business.

                  But the numbers are numbers, they should be understandable.

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                  • #10
                    I am a CPA, CFP, and I do advise two clients that are connected, one that is part of an ER physician's group and one that is the owner.  (I got referred to the 2nd client by the 1st).  I do have a conflict of interest occassionally in terms of trying to maximize the 401K plan for the owner and not his employee, but I simply follow the golden rule of giving the right advice to the right client, regardless of whoever else I may be affecting.

                    However I have seen situations where advisors have been unduly influenced, so just to be safe, I would get a different CPA if I were in your shoes.  It's possible for the CPA to be unbiased, but why take a chance.

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                    • #11
                      You should be seeing a spreadsheet that has your collections minus ALL of your overhead. We get a spreadsheet with everyone's collections on it every quarter. It should be easy to see where your money is going. More than likely, you're just underestimating the overhead. Half of our overhead is fixed and the other half is variable (based on percentage of each partners collections).

                      I would sit down with your practice manager (at least that's the way it works in my practice) and go over the numbers. I don't think you need an accountant to go over them unless you have specific questions after talking to your practice manager. But that could cost you more money if they bill you for that.

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                      • #12




                        You should be seeing a spreadsheet that has your collections minus ALL of your overhead. We get a spreadsheet with everyone’s collections on it every quarter. It should be easy to see where your money is going. More than likely, you’re just underestimating the overhead. Half of our overhead is fixed and the other half is variable (based on percentage of each partners collections).

                        I would sit down with your practice manager (at least that’s the way it works in my practice) and go over the numbers. I don’t think you need an accountant to go over them unless you have specific questions after talking to your practice manager. But that could cost you more money if they bill you for that.
                        Click to expand...


                        Pretty much exactly what I was going to post.  Where da spreadsheet at?

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