#174 Why Your Net Income Doesn't Match Your Bank Account (And How to Fix It)

Your CPA sends a P&L on the 20th of every month showing a positive bottom line. Then tax season hits — or partners ask for a distribution — and the cash isn't in the bank. Sound familiar?

This episode breaks down why standard P&Ls fail private practices doing $150K+/month, and how to replace them with a live financial dashboard that tells you the truth in real time.

RESOURCES MENTIONED IN THIS EPISODE

📊 Practice Revenue Leak Scorecard (free, 60 seconds)
Your dashboard is only as accurate as the billing data feeding it. This 60-second diagnostic shows you exactly where your revenue is leaking — before you build a dashboard around bad numbers.

👉 https://eligibility.natrevmd.com/nrm-revenue-scorecard-v3?utm_source=buzzsprout&utm_medium=organic&utm_campaign=ep174

🩺 Book a billing review with NatRevMD
If you want us to look under the hood of your revenue cycle directly:
👉 https://calendly.com/heather-natrevmd/

We cover the 5 reasons every practice owner needs a dashboard (not a delayed P&L):

1. True operating profit — separating partner distributions from operating expenses, so you never spend cash you don't have

2. A clear "raise readiness" threshold — pre-agreed rules so staff raise conversations stop being emotional

3. Exposed expense ratios — clinical comp, admin overhead, per-provider cost coverage, all as % of net collections

4. The 4-hour CPA spreadsheet replaced by a 15-minute partner meeting — same payoff, half the time, current data

5. Real confidence to grow — knowing exactly when you can safely add a provider, expand space, or distribute cash

Plus: we walk through the exact prompt we used to build our dashboard with AI (Manus), the HIPAA hard line we never cross, and why none of this matters if your billing data is wrong upstream — we've seen practices with beautiful dashboards 8% off because of denials no one was tracking.
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ABOUT NATREVMD

We're a physician-led revenue cycle company built specifically for independent medical practices doing $150K+/month. Our podcast is rated #2 globally for medical billing & coding podcasts (Feedspot 2025) and ranked in the Top 100 US Healthcare Podcasts (Feedspot 2026). 

Transcript

SPEAKER_00 0:04

If you're running a medical practice, you're probably making decisions off of some profit and loss statement that your CPA sends you. You see a positive bottom line and assume that the practice is healthy, and then tax season hits, or your partners ask for a distribution, or you need to hire another provider, and then the cash just simply isn't in the bank. Welcome to NatrevMD, a podcast where we share tips on optimizing medical billing and improving practice efficiency so you can have the business of your dreams. I'm your host, Dr. Heather Signorelli, founder of Nat RevMD. Let's get started. Now, we all know, and for our own business as well, standard PLs are a good place to start, but they blur the lines that matter most in a private practice. It mixes partner distributions with operating expenses, and it doesn't track your clinical overhead ratio. And they don't actually really tell you whether a revenue dip came from fewer visits or from billing and collection leaking upstream. So today we're gonna fix all of that. And so by the end of the episode, you'll know how to build a live financial dashboard that you can do on your own that separates true operating profit from owner compensation. It's gonna track right practice specific ratios in real time, and it's gonna allow you to make confident decisions without waiting on a CPA report. And in today's age with AI, there are so many different tools at your fingertips that weren't there even a year or two years ago. And the crucial piece that most practices miss is obviously none of this is gonna work if your beta, if your billing data is wrong upstream. So we've seen practices with these amazing dashboards, amazing CFOs that were 8% off because their denials were never posted correctly. So obviously the data feeding your dashboard has to be correct. And every financial decision downstream is gonna be wrong if the data upstream is not accurate. So obviously that's where revenue cycle management either makes the dashboard powerful or it can make it very dangerous if you are not understanding all of those parts. But more importantly, um, I think moving beyond a standard PL happens when you hit a certain size. And building a dashboard is really critical for a few reasons. So reason number one is it's gonna actually reveal your true operating profit, right? So traditional accounting puts partner distributions um below that line. And so your PL can show a$50,000 profit, but you've already distributed$60,000. And so obviously you're gonna be having issues with that. And so a proper dashboard actually takes the PL data and allows you to start tracking and trending things and asking it questions that you can't do with just a static PL. Obviously, PLs are great, it's a good place to start. But when you have decisions that you need to make around employed physician compensation or partner compensation, or can you give everybody a raise and how do you project revenue, right? And so looking ahead, what does that look like? And can you make some assumptions as to what the rest of the year is going to look like versus just waiting for the end of month to come through? And so this is why it's really, really important for you to understand more than just what your PL is showing you. Obviously, if you have a CFO or part-time CFO, they may be doing this for you. If you're in that mid-range size and you don't quite have that built yet, then this episode is for you. So obviously, reason number two is it allows a financial dashboard allows you to have a raise readiness threshold similar to what I mentioned. And in our own company, we're starting to build this out as well, which is what made me think about doing this episode because we are also in that position. We have, you know, finance individuals who help support the company, but I want to be able to see financial projections in a different way, right? I really want to understand gross profit, overhead expenses, trending those over time. We had some annual raises that were put into place this year. And so, how do those impact profitability? How do those impact growth, right? So if we have practices coming on board and the same situation for a medical practice, right? So the questions are a little different for you as a medical practice, but the premise is still the same, right? So a PL is a really good static metric. It's a really good thing for you to measure. But then how do you project out what the next 12 months looks like? How do you schedule annual raises? And then, like I mentioned before, how do you manage provider and or partner compensation? Because those things are going to be different. And so tracking and trending, you know, your overhead expenses and then how you manage compensation for your providers is really, really important. And I find it easier to do if you take those PLs and be able to build a dashboard that works. And again, a CFO can be doing this for you. Um, there's just so many really cool tools that can do this, taking a QuickBooks like data and putting that into something that is very meaningful and can track and trend things month over month in a visual way. So dashboards allow you to set clear rules, right? So if net profit before profit sharing is X percent and cash reserves are Y, then we can approve raises, right? And so you can start building in some logic around thresholds that you want to set for your company. So instead of this stressful emotional guessing conversation that you're having where you're just trying to figure out, gosh, everybody's asking for raises. I need to just make sure nobody leaves. I'm just gonna give raises and cross my fingers and hope that it all works out. Building a dashboard that you can ask questions to is really helpful. And there's some AI tools that are out there. I really like many of them. So Claude, I think is really, really good. Manus, I think is great. You do just want to make sure that you're understanding the security risks when using any of these tools. And of course, making sure that whatever you do build is not public facing, that you you, you know, keep it behind closed doors. Reason number three that building a dashboard is really critical for our business is that it exposes, you know, expense ratios, right? So as a practice grows, overhead can sometimes creep, expenses can creep up that you're not expecting, right? So we had a practice that was doing this exercise and they found a$5,000 telephone bill that was recurring because their subscription for a telephone, you know, answering service, and it wasn't the humans, it was literally just the software, had ballooned up and up and up. And so then they were able to look at that and renegotiate that. And so if you're only looking at the dollar amounts and it's summed up or rolled up into multiple categories, you may miss that trend line. And so having a good dashboard allows you to track and trend expenses, which you can do in a PL, but then ask it questions of, hey, which expenses are increasing month over month or call out the top expenses that increased more this month than they did last quarter, and call out those sort of things in a uh ask and answer sort of way. Obviously, also taking a look at clinical compensation as a percent of net collections, or even looking at your providers and comparing their net receipts compared to their compensation package. Obviously, we've talked podcasts about that process. This is just a really cool tool where you can build these financial dashboards literally with very little uh, you know, techie experience. Um, I am not a tech person. So using the AI tools that are out there, you can build static spreadsheets, or you can even build dashboards that you publish literally with, you know, you know, no code, right? So you're not a coder. You can also track admin staff as a percent of revenue. You can look at per provider cost coverage. So if your profit starts to drop, you can see in seconds whether it's a collections problem, a visit volume problem, or an overhead problem. Cause again, you're pumping all that data into your dashboard and being able to set that up. So, reason number four to me, I think you can get a whole bunch of spreadsheets, whether they're billing or CPA related. And you're looking at all of them going, okay, what does this actually mean? So I believe taking a dashboard and building this out allows you to take the data and understand it in a meaningful way. And hopefully you do have a CFO who's sitting down and doing that with you, or somebody, you know, even fractional. Um, a lot of practices who are in that 5 million annual revenue range may not have a full-time CFO, or if they do, or if they have a CFO, maybe it's a part-time person. So you don't need your CPA building this custom Excel every month that lands on your desk three weeks after month end, that then you don't even know how to interpret. So I really think that having a live dashboard, you can export the QuickBooks CSV. And again, somebody that you can delegate this to. Um, and then they can add your payroll summary, they can add all the dashboard updates automatically. And then when you sit down to have a partner's meeting, you can walk in and you can look at the dashboard, the trends, um, and your kind of key questions that you're going to ask can be done live and within 30 minutes. So it just takes a very painful process, in my opinion, to make it a lot more user-friendly. I'm a big visual person as a pathologist. So I love being able to see kind of trend lines and green arrows or red arrows. And so a dashboard can be built again through a number of different mechanisms, which we'll talk about in a minute. So, reason number five, right? So it gives you actually confidence to grow. Um, when you stop managing just by these static PLs and you're actually asking questions and understanding compensation models, you can start managing with a clear dashboard and you can act as the CEO that you are. And so, really recommend um, you know, sitting down and really understanding, okay, what are the questions that I have? What are the data formats that I've been given? So, whether that's billing data, whether that's financial data from your accountant, pulling that all together and having a strategy session to sit down and go, okay, what do I want to track and trend? And again, the finance folks can be in the room and help you build this together, but it just takes something static and makes it into a live visual way. And again, we're doing this in our own company. Um, it has been really, really helpful. One of the exercises we literally just went through was building this financial dashboard using again our QuickBooks data. But then we wanted to do annual raises. We had some practices onboarding later this year. We have some staff that we were hiring. And so we can plug in all those numbers literally with a push of a button and it calculates okay, how does that change? Um, how does that change profitability? Can you afford it? What, you know, what does that look like? And then it also projects out, you know, the next nine months or whatever, if you however many months left of the year, every single month of gross revenue based on historical, historical uh information. And so it's a good way to start to visualize what could the next six months look like. And again, the more data you have and you can pump it into it, the better. And it allows you to just again sit there and ask those questions, which is I find really, really cool. So you might be thinking, you know, obviously this sounds amazing, but building a custom dashboard sounds complicated, expensive. So just to let you guys know, we did not hire a developer to build this dashboard. Um, we did a combination of Claude and Manis. And again, you do want to make sure that you understand security risks. And uh there's other ones out there, uh, lovable, ACE44. Again, these are no code um tools that can sit there and talk with you and build dashboards for you. Obviously, you're gonna have to upload the data. So you need to make sure that you understand again the way each of these different software applications or AI applications use that data or share that data. Obviously, you'll never upload anything with patient identifiers to a public AI tool. I think that for me personally, financial summaries, PL data, payroll total totals, that to me seems safe. Again, as long as it's behind those security walls that some of these applications have. We don't ever use PHI or claims level data or anything HIPAA covered. That has to stay in obviously your secure system. So we do have a hard line around that. So you'll just want to make sure that you understand what's in your data first and clean that up before. And again, you can build these in Claude with minimal uh public dashboard facing. Like you can build the dashboards within Excel and have those be something that you can download and not publish. So there's different ways to do this, but I do think that you can do this without actually hiring a whole team to do it. There's also consultants that you could obviously bring on if this seems overwhelming to me. I love this stuff. I could sit and just play around with this in my spare time. So that's probably on me. But I do think sitting down and really having that discussion of what do you want to track, you know. So we're talking, you know, charges, receipts, expenses, and then really getting down into uh expense detail so that you're understanding uh, you know, overhead versus um, you know, employee or employed, uh employed physician compensation versus partner compensation and uh be able to go back and forth. And again, you talk to it just like I'm sitting here talking to you right now. It's not a coding situation. And I do think the more you play with AI, the easier it gets. And so um, I, you know, just got really excited about some things that we've been doing on our end with some of the AI tools. I'll have a couple podcasts on things that we're doing just to share with you guys on um some ideas in case you haven't started uh playing around with this yourself. So obviously, within minutes, you can have an AI layout of structure. Um, because again, if you tell it who you are and who you want it to be, right? So, you know, be a financial consultant. I'm a medical practice owner. Um here's, you know, a little bit about my practice. Here are the, you know, questions I have. Help me build a uh an organized dashboard or financial dashboard so that I can answer these questions and it can build that for you. And then you can pull all the data that you have and then start just uploading it again to Claude. Again, no patient identification stuff, but you don't need to be technical. This is super easy to do. So just wanted to recap, you know, what we've talked about today. So obviously, building a financial dashboard, you get better information, faster decisions, and truly have less uncertainty around just money. I personally don't think that just looking at a static PL is enough. And I just think that, you know, having something visual, something you can ask questions to, something you can update and add data to every month and get that same picture and view is really, really critical. So obviously you want to make sure your billing data is accurate. And we do actually have a uh true profit calculator. So it is the fastest way to put this episode into action. So the link is in the show notes. So check on out, uh check that out. So remember, dashboard is only as accurate as the billing data. Like I said, if your revenue has leaks and you can't see those, the prettiest dashboard in the world's uh not gonna be helpful. So that's why we do the work we do at NetRevMD. So if you do, if you are looking for a new billing team, head on over to netrevmd.com and uh check us out. We have a free metric revenue audit up in the right hand corner. Thanks so much for listening, and we'll see you next time.