Introduction to Budgeting for Expenses

Canada is home to a vast talent pool of skilled and trained health professionals who are highly valued in our society. From psychotherapists to naturopathic doctors, chiropractors, physiotherapists, osteopaths, massage therapists and more, health professionals make a lasting impact on the well-being of individuals. If you are one of these professionals, your business matters more than you know, which is why this guide is useful to create a budget for a successful, smooth-running health practice well into the future.

Budgeting for High-Expense Months

In this blog, we look specifically at how to master the art of budgeting so that you can meet those high-expense months head-on and watch your spending. After reading the article, you’ll have a better understanding of why it’s important to plan ahead for these months and how you can leverage various tools and resources available to you as a health professional to budget for your expenses like a pro, build your emergency fund and watch your spending.

Short Summary

Why creating a budget is essential for health professionals
How to forecast and prepare for high-expense months
Case study: a health professional’s successful managing of a high-expense month
Utilizing free resources to budget regularly
The benefits of being financially prepared

Different Types of Budgeting for Health Professionals

Budgeting in the health industry is more or less the same as any other budgeting process, except that it takes into account the unique challenges and nuances relevant to health professionals like yourself. Let’s take a quick look at these types so you can see how they apply to your business:

Sales budgets: A sales budget outlines the expected income from patient sessions, products, programs and other sources of income generated by your practice. Key elements of the budget include the number of sessions anticipated or programs to be sold for a given period, fees you expect to charge for your services and products, and seasonal variations and trends. By creating a sales budget, you will be able to plan for slower periods and set performance goals.

Operational budgets: An operational budget helps you to plan out the operational costs needed to keep your business running, such as practice management software fees, advertising, licenses and membership dues, rent, and staffing costs. Staff wages often make up the bulk of expenses and need to be budgeted for carefully. Take into account extra staffing, temp staff, overtime hours and similar spending. This budget can help you review and cut costs where needed.

Capital budgets: A capital budget plans out your significant long-term investments that will have a lasting impact on your practice and its future potential. Capital budget focuses on allocating funds that will improve your practice’s productivity, capacity or growth potential over the long run. Examples of capital expenditures include purchasing equipment, technology, renovation and furnishing an office space, and start-up costs for a new business venture. Try to align your capital budget with the overall vision for your health practice.

Get started right now when you opt in for our FREE budgeting checklist! Click below to download your free template from Tyagi Group that makes budgeting so much easier!

Why Budgeting is Essential for Health Professionals

It is easy for your business expenses to get overwhelming and spiral out of control if not managed carefully with a budget.

So, how do you do this when your expertise lies in health and not finance management? With a little help and guidance from our dedicated team of registered CPAs at Tyagi Group, you can cope with financial challenges in your new or established health business. We always start by alerting our clients to the importance of budgeting because, without it, monthly expenses can overshadow your passion for helping people.

Think of a budget as a roadmap. Your destination is a flourishing health practice with constant cash flow, and expenses all paid. The budget helps you plan out every detail so you can clearly see what your low sales periods and expenses are, and how you are going to meet them and when. A well-structured budget is also one of your best defences against financial challenges, like with a savings account emergency fund.

Unique Financial Challenges Faced by Health Professionals

One of the biggest challenges faced by health professionals without a budget, both in Canada and around the world, is that it is a constantly evolving and fluctuating industry. There is always new medical research emerging, new medicines entering the market, and new health software and technology being developed, which can increase productivity and reduce errors. This can be exciting and frustrating at the same time. While new advancements in health research can benefit your patients and streamline your business, it means that you constantly have to adjust your operational budget or your capital budget to learn these new approaches or purchase new equipment.

Read more here about your monthly budget essentials for new and established health professionals.

Other Challenges You Should be Prepared For

Increasing or decreasing patient volumes depending on the time of year
Time-consuming tax filing requirements & deadlines
Staff shortages
Medical supply issues and delays
Rising interest rates

5 Benefits of Budgeting for Health Professionals

Helps with decision-making
Align investments with your financial goals
Prevents over-spending through effective management of spending money
Reduces impulse purchases and costly errors
Provides clarity on how funds must be allocated to different departments, campaigns or projects

How to Forecast and Prepare for High-Expense Months

There are many different factors that could be the reason for higher than-normal spending in your health practice during certain months of the year. Forecasting expenses will help you stay one step ahead of managing your finances so you aren't terribly surprised when they come up.

Here are some contributing factors to high-expense months for your monthly expenses budget:

Tax payments
Renewing licenses
Purchasing new equipment
Ordering new stock
Hiring additional staff
Installing new software
Renovations

Anticipating Cost Spikes Using Data

So, you may be wondering if forecasting expenses is really possible since they can be unexpected at times. Our answer is yes! This doesn’t mean that you have to be clairvoyant; it just means applying some financial planning and analysis to identify patterns in your business’s regular expenses that are likely to recur. Start your monthly budget by making a list of your fixed expenses, such as rent, practice management software or staff salaries. Include only the items that you know will never change. Next, consider expenses that come up quarterly or only once a year, such as licenses and insurance liability.

By forecasting your expenses, you will be able to meet them confidently, feeling more prepared and thus minimizing unwanted stress. You can decide in advance what monthly budget and

financial planning strategies you will use to meet high-expense months, such as saving up in advance for the expense or cutting back on certain spending. The CPA professionals at Tyagi Group can help you with forecasting expenses that are specific to your industry, so you don’t have to do it all alone.

Step-By-Step Guide to Prepare for High-Expense Months

With your forecast ready, you can now start with intensive financial planning to help you get through high-expense months. Like an athlete training for a big race, this is a winning strategy that will help your business stay healthy and keep the stress well at bay!

Here are some easy steps to follow to ensure you are ‘financially fit’ for high-expense months:

Use high-income months to settle debts or start an emergency fund
Identify periods when you anticipate low patient volume and boost marketing ahead of these periods
Make use of supplier promotions and bulk discount deals throughout the year to keep those costs down
Speak to a tax specialist like Tyagi Group to find ways to create a budget for taxes
Save money ahead of expense peaks and cut down unnecessary costs
Use technology to track expenses and create a digital budget calendar that can be quickly accessed and adjusted for review and reporting purposes. Download the FREE budgeting checklist from Tyagi Group and read more about how to utilize the free resources below.

Case Study: Successfully Managing a High-Expense Month

One noteworthy case study was our client Megan who is a health professional in Canada. Megan sought Tyagi Group’s assistance with their company’s budget. Not having clarity on how to manage spending was adding to their stress.

In their testimonial, they described Tyagi’s budgeting insight as simple yet in-depth and straightforward enough to provide real value to their health practice. As a result, she was able to manage expenses with confidence.

Megan is now able to identify much better where they can save more and where they need to cut back spending in order to get through high-expense months with ease.

This case study was just one example of how Tyagi Group’s budgeting tools came in handy to assist a client with budgeting.

“Excel spreadsheets are always amazing. Such a great visual way to present information and so easy to use,” said Megan.

Here’s Megan’s full testimonial of their experience with Cassandra and Tyagi Group:

“Cassandra's courses are always jam-packed with value. They are easy to follow, straightforward, and take a lot of the "work" off your hands. Cassandra provides done-for-you spreadsheets that make tracking so easy but also provide an in-depth look at your money. Their experience with health care providers means that all of the information is applicable and more specific than working with just any accountant. Thank you, Cassandra!”

Whether you are a therapist, naturopath or any other health professional looking for effective ways to maintain financial stability during the highs and lows of running a health business, Tyagi Group has the resources to help you. We’ve done it for others, and you could be our next success story!

Utilizing Resources for Budgeting

If you are eager to get your hands on some really amazing budgeting tools, Tyagi Group has some FREE resources to get you going. We’ve created these to help you stay on top of your health business finances and survive high-expense months without spending even more on resources.

As a health professional, your expertise lies in healing and providing treatments for your valued patients, which is why we are here to assist with making budgeting as pain-free as possible so you can focus on what you do best.

One of the problems many health professionals face is staying on budget, and these budgeting tools will not only help you to create and organize your budget but will also help you to stay accountable with regular monitoring strategies. A huge bonus is that our free budgeting tools also save you time on having to create spreadsheets yourself - we’ve got it all covered for you!

Why Use Tyagi Group’s Budgeting Tools?

When it comes to using free resources for your health practice, we recommend you safeguard your business with resources from an established, reputable source. Your finances are the backbone of your business and what keeps your doors open so you can continue helping patients who depend on you, so don’t leave them up to chance!

Tyagi Group consists of a dedicated team of financial experts, tax advisors and registered CPAs who are not only great at what they do but also have experience with health professionals. This means that our free resources are not generic.

Our budgeting tools are carefully designed to meet the unique needs and challenges of health professionals in Canada. Here are some of the free resources you can download on our website:

The Benefits of Being Financially Prepared

Financial preparedness is a crucial aspect of a health professional's life in Canada, offering a multitude of benefits that extend beyond just monetary security and can help you create a sustainable future for your business.

In this blog, we’ve discussed that high-expense months are inevitable, but being prepared for high-expense months enhances your ability to provide quality care, invest in growth, and contribute positively to society as a whole.

Why It Helps to Budget for High-Expense Months

Peace of Mind: Financial preparedness enables peace of mind and reduces stress, allowing you to focus on your patients without the constant worry of financial instability. Knowing that your basic needs are met allows you to deliver the best possible care.
Debt Management: Many health professionals in Canada graduate with significant student loan debts. Being financially prepared enables you to manage and pay off these loans effectively, reducing the burden of interest and stress associated with debt.
Investment Opportunities: With surplus income as a health professional, you can explore investment opportunities to grow your wealth over time.
Professional Development: Budgeting for high-expense months allows you to enhance your skills and knowledge to provide improved care that will benefit your patients.
Emergency Preparedness: By preparing for high-expense months, you will have a safety net to cover the peak in operating costs or capital expenses without having to sacrifice service quality, and it will reduce stress during challenging times.
Quality of Life: Financial readiness allows health professionals to enjoy a higher quality of life. Start budgeting now to be able to contribute to a personal vacation or retirement fund and overall well-being and work-life balance.

Let’s Recap!

Here are the key takeaways from this blog to help you master the art of budgeting so your health business can sail through high-expense months:

When you create a budget, include sales budgets, operational budgets, and capital budgets you plan your sales and expenditures and stay on track
Try to forecast high-expense months using historical data and prepare for these with a solid budgeting strategy, technology and expert help for tax savings.
Utilize Tyagi Group’s resources when you need ready-made budgeting tools to ease you through the process, free up your time and save money.

Take Action Now with this Budgeting Online Course Designed for Health Professionals

If you agree with us that your financial freedom lies in your hands and is not going to magically appear, then our Business Foundations Budgeting Course is for you! This course is for Canadian health professionals who see the benefits of budgeting and are ready to get proactive about their financial preparedness.

Learn how to build a 2-year budget, how to predict your monthly income, and more. If you want to manage your upcoming high-expense months and set up a rainy-day fund, sign up for this course now and learn from our professionals how to cope with a level-headed, data-backed approach that works. Click on the link below; we are ready to help you!