For effective financial planning, there are a few basic management facts that must be accepted. The past work done by management specialists in our profession have let us reach the point that we are at today. If we are satisfied with what we did to get where we are, we will stagnate. There are five basic facts which need to be embraced to understand the need for income center management.
Every practice knows their specific income centers.
The Flip Side of Income To develop an income center, you must know the associated expenses with that functional area. Only one in 20 facilities attempt to match income to expenses due to the perceived complexity of the task. We could continue these income to expense examples, but you can see that the information needed to just answer these three questions is not easy to find in your present daily or even monthly fiscal management program. But by definition, profit is the difference between gross income and total expenses. Owen McCafferty paired the expense to income using four-digit codes, keeping the last three digits the same for an expense and its comparable income.