Don’t sign physician contracts without access to financial records
In order to determine the financial strength of the practice you may join, it is important to review certain financial records beforehand. If you don’t, you could be subject to poor business management causing you to be forced to take pay cuts, an excessive work load, early termination, or a bad partnership deal, just to name a few. The right time to review financial records is before, during and after employment.
As an employee you may find the employer unwilling to share certain information while as a partner, you must have access. Some of the key financial documents to review are the following:
(having copies of the last three years is ideal)
- Tax Returns
- Profit and Loss Statements
- Balance Sheets
- Accounts Receivables
- Accounts Payables
- Collection Process Documents
- Monthly and Quarterly Performance Reports
It is recommended that you have an advisor who is familiar with financial reports, review these documents and explain to you what they find. Having a sense for the financial strength of the employer is critical so that you don’t re-locate, move your family, buy a new home etc. and find out before too long that the offer wasn’t everything it was promised to be. Therefore, doing all that you can to get access to the records before joining can prevent painful surprises. While working with an employer, getting regular updates on your performance and your division’s will continue to provide you the financial health and economic condition of the employer. Lastly, it is very important at termination or retirement, you have a full accounting of the money that is owed to you so that you can be sure to get it once it is collected by the employer. Otherwise, you may have tens of thousands of dollars left on the table after you leave.
