Revenue, less employee payroll, less operating expenses.
To you, all in
$0
draw + profit + retirement
Set aside for taxes
$0
of net profit
Unallocated
$0
profit with no job yet
Your profit and loss
Everything the practice collected
Clinicians and admin staff, not you
Rent, EHR, software, everything else
Give every dollar of profit a job
What you pay yourself to live on
Your reward on top of the draw
Solo 401(k), SEP, whatever you use
The cushion the practice holds back
20% of net profit
Rough illustration only, not tax advice. Your real rate depends on your entity, income, and state.
Where every revenue dollar goes
Allocation of revenue
Amount
Per month
% of revenue
The point of this exercise. Most practice owners look at one number, what is left in the account, and call it profit. This splits that number into the jobs it actually has to do. If the unallocated line is large, you are not rich, you are undecided. If it is negative, you have already promised the same dollar twice.
