Accountants are “problem solvers” – Healthcare Industry Edition (Part 2)

“Every family has its own problems, and every industry has its own difficulties.” Taking the healthcare industry as an example, doctors use their hands to practice medicine and diagnose patients, but they may not be adept at managing their business. A senior accountant can act as a “problem solver,” assessing the situation, identifying potential issues early on, and preparing for the future, which can help avoid taking unnecessary detours.

Mastering the market and anticipating opportunities

Company Development Suggestions

Businesses always experience ups and downs, whether it’s going public, expanding, merging, or downsizing. Buyers, investors, and banks will all look at your company “CV.” In addition to continuously monitoring the company’s finances and observing industry trends, another important task for accountants is to know how to showcase the company’s selling points and advantages perfectly.

For doctors who are starting their own practices for the first time, company tax reporting can be a foreign language to them. Just the act of tax reporting alone can have a series of effects on a company’s development, for better or for worse. Some companies will go to great lengths to avoid paying taxes, by making the company looks like operating at a loss even though it is making money. When a company expands and develops, potential investors are encountered. They may be scared away by the company’s past “performance” after looking at its tax returns and financial statements for several years. They may truly believe the company is operating at a loss.

Secondly, when a medical group applies to go public, it is different from other industries. Even if the customer base is sufficient and business is steadily increasing, there is still a chance that it may not meet the requirements for going public due to different factors (eg sustainability). Even for industry leaders, it is recommended to have a fixed team of accountants to assist with expansion or going public, and to review before applying, in order to minimize obstacles.

Asset Evaluation and Verification

During business sales and transfers, both the buyer and seller must reach a consensus on the selling conditions and price. Assessing “how much is the business worth?” may seem vague, but it can actually be calculated. Since the interests of both parties are in opposing positions, a professional accountant can provide a fair calculation for the total value of a company’s assets as a whole.

When a clinic is being sold or purchased, one of the most important assets is the “patient file,” which is a crucial piece of information that can greatly affect the price, and cannot be obtained from an audit report. It is necessary to have an accountant conduct verification and certification to ensure that the number of active patients provided by the seller is correct. If the seller lacks business valuation knowledge, as well as experience in communicating with buyers, and without the intervention of an accountant, they generally cannot present the best condition and development potential of the business to the buyer, which can greatly affect the outcome of the transaction.

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