Michael Isaacs | OptionPath Partners LLC | October 23, 2026
A healthy month on the income statement can still leave a physician practice short of cash. Collections arrive on their own timetable, while payroll, rent and other commitments come due regardless. Owners need enough visibility to make decisions before a low bank balance forces the discussion.
A monthly conversation can begin with three questions. The answers should connect the practice's operating results to the money it can actually use, with enough detail to distinguish a temporary fluctuation from a problem that requires action.
Where did the change in cash come from
Start by explaining the movement from the beginning bank balance to the ending balance. Separate cash generated by normal operations from borrowing, owner contributions and other sources. A higher balance after drawing on a line of credit tells a different story from a higher balance produced by stronger collections.
Look at the timing within those results. Catching up on older receivables can provide welcome cash without indicating that current work is collecting more reliably. Similarly, paying a delayed expense may reduce the balance this month even though the underlying commitment began earlier. Owners should understand what is recurring before using the result to justify a new expense or distribution.
What commitments will the available cash need to cover
The bank balance is only useful alongside the obligations ahead. Review expected receipts and payments over a practical forward period, such as the next several payroll cycles. Include commitments already made for recruitment, equipment or a new location, even when the invoices have not arrived.
Keep restricted funds and amounts already committed separate from cash available for discretionary use. A forecast does not need elaborate software to be useful, but its assumptions need to be visible. If anticipated collections slip, owners should be able to see which commitments become harder to meet and how much room remains to respond.
What decision should change because of what we see
The review earns its place when it changes a decision. A collection delay might require focused follow-up, a revised distribution schedule or a different timing for an investment. Persistent pressure may warrant a closer look at the staffing model or service economics. The response should address the cause rather than repeatedly filling the gap.
Assign responsibility for the action and revisit the assumption that prompted it. If the forecast depends on a backlog being collected, someone should explain the recovery plan and report whether it is working. Owners also need to agree on when changed conditions require another discussion before the next monthly meeting.
At OptionPath Partners LLC, we help physician owners connect financial visibility to the choices and follow-through required to run the practice. These questions will not eliminate uncertainty. They can give owners more time to weigh a decision while useful options are still available.
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