For many physicians, financial stress has little to do with patient demand or clinical performance. Instead, it stems from uneven reimbursement cycles, rising operating costs, and cash sitting idle while expenses continue to mount. Even profitable medical practices can feel financially constrained if cash flow is poorly managed.
According to Bruce Hrovat, a former senior banking executive with more than 30 years of leadership experience in retail banking, payments, liquidity, and cash-flow management, these challenges are both common and solvable. As the founder of LiaFi, a fintech platform designed to help small businesses earn more interest on the cash they already have, Hrovat works closely with practices looking to improve liquidity without sacrificing access.
“Many medical practices hold far more cash in their checking accounts than they really need because it’s difficult to predict when reimbursements will come in,” Hrovat says. “When money arrives throughout the month, practices feel like they have to keep a lot of cash on hand to cover payroll, rent, taxes, and vendor bills in case payments from payers are delayed.”
That caution is understandable, but it often comes at a cost. With traditional checking accounts paying an average of just 0.07 percent interest, excess balances generate little to no return. The result is what Hrovat calls “idle cash,” money that could be working harder to support the practice.
Getting Paid Faster Starts With Process Discipline
One of the most effective ways to improve cash flow is to shorten the time between care delivery and payment. While reimbursement timelines are often outside a physician’s control, the front end of the billing process is not.
“There are a few simple steps physicians can take to speed up the revenue cycle without changing their entire billing system,” Hrovat says. “The most important is submitting claims faster, ideally the same day or the next business day after care is delivered, and following up on denials promptly.”
Small delays compound quickly. Waiting several days to submit claims or weeks to address denials can push cash receipts further out, creating unnecessary strain on operating balances.
Patient balances deserve equal attention. Hrovat emphasizes the importance of sending bills quickly and collecting patient responsibility as close to the visit as possible.
“For patient balances, practices should send bills quickly and, when possible, collect the patient responsibility the same day, either before or after the visit,” he says. “Reducing payment friction also helps.”
That includes offering multiple payment options, such as online payment links, and using automated reminders for outstanding balances. “The faster claims and bills go out, the faster money comes in,” Hrovat says. “It’s simple, but it makes a real difference.”
Identifying Idle Cash Without Adding Complexity
Many physicians assume that improving cash flow requires complex forecasting models or CFO-level oversight. In reality, identifying idle cash can be surprisingly straightforward.
“A simple way to identify idle cash is to track your top five inflows and outflows,” Hrovat says. “This can be as simple as spending 10 minutes each week looking four to six weeks ahead at what’s coming in and what’s going out.”
The method matters less than the habit. Whether practices use a spreadsheet, an app, or even pen and paper, the goal is to build a forward-looking view of cash flow.
“This gives you a forward view of cashflow so you can spot shortfalls early and take advantage of surplus when it appears,” Hrovat says.
Once surplus cash is identified, practices often hesitate to move it because traditional high-yield options can restrict access or complicate operations. Minimum balances, transaction limits, and delays in accessing funds make physicians understandably cautious.
“Many traditional high-yield choices limit liquidity, which makes physicians nervous about tying up money they might need on short notice,” Hrovat says.
LiaFi was designed to address that concern. With LiaFi, medical practices can earn 2.5 percent APY on surplus cash, significantly higher than the average checking rate, without sacrificing access.
“There are no qualifying hoops, no lockups, no transfer limits, no fees, and no fine print,” Hrovat says. “A LiaFi Business Account connects to your existing bank account, so there’s no need to switch banks.”
Practices simply move money into the account when it’s not needed for immediate payments and can access it at any time. Deposits are FDIC insured through Magnolia Bank, providing additional peace of mind.
Trimming Recurring Expenses That Quietly Drain Margins
Cash flow is not just about inflows. Recurring expenses, particularly those that go unnoticed, can quietly erode margins over time.
“Software is usually the first place to look,” Hrovat says. “With so many systems in place today, many of which were rapidly adopted during the pandemic, it’s common for practices to pay for tools they rarely use.”
He recommends reviewing software and subscriptions quarterly. “If you haven’t used a service in the past 30 days, cancel it,” he says. “You can always sign up again if needed.”
Beyond software, administrative and banking-related fees are often ripe for review. Payment processing fees, service charges, and vendor contracts can frequently be renegotiated.
“Insurance premiums, utilities, cleaning services, IT and security contracts and marketing subscriptions should also be reviewed regularly,” Hrovat says. “A disciplined quarterly review can reclaim thousands without impacting anything clinical.”
Forecasting Cash Flow to Reduce Stress and Surprises
While many physicians focus on their monthly income statement, cash-flow forecasting provides a clearer picture of financial health.
“Along with tracking your top five inflows and outflows, daily awareness of your cash balance is essential,” Hrovat says. “When you check your cash every day, trends show up faster and surprises become rare.”
Practices should always know their current cash balance, average monthly expenses, and how many weeks of runway they have. That visibility makes planning far more manageable.
“That insight provides stability,” Hrovat says. “Planning for equipment purchases, staffing or expansion becomes more controlled and less stressful.”
Simple Tools for Practices Without a CFO
Small and mid-sized practices often lack dedicated financial leadership, but that does not mean they have to operate blindly.
“Start with the basics,” Hrovat says. “Accounting tools like QuickBooks or Xero help track activity, while forecasting tools like Pulse or Float help you see what’s coming.”
High-yield business accounts with automated sweeps can also help ensure unused cash earns interest without constant manual intervention.
LiaFi adds another layer of visibility with its TOR Score, an advanced cash-flow tool that provides a real-time assessment of financial health.
“It connects to your bank accounts and translates complex transaction data into a single score that reveals your cash flow stability,” Hrovat says. “It helps ensure you can meet obligations, invest in opportunities and navigate financial challenges.”
Supporting Growth Through Strong Cash Management
For practices looking to grow, whether by adding service lines, increasing staff, or opening new locations, cash management becomes even more critical.
“Growth requires stability,” Hrovat says. “When you understand your financial health, you can make expansion decisions with a lot more confidence.”
Strong cash management lowers risk and provides flexibility. Even small improvements can have a meaningful impact over time.
“Saving or earning just ten dollars per day adds up to $3,650 a year,” Hrovat says. “Trimming expenses and earning interest on cash you already have may seem minor, but those small wins create real flexibility over time.”
Rethinking Long-Held Assumptions About Cash
After decades in banking and payments, Hrovat sees one misconception surface repeatedly among physicians.
“The biggest misconception that physicians, like all small business owners, have when it comes to cash-flow management is that their money in checking or operating accounts can’t earn significant interest,” he says.
For years, near-zero interest rates conditioned practices to accept minimal returns as the cost of accessibility. That assumption no longer holds.
“That belief is outdated,” Hrovat says. “Physicians can earn real interest on surplus cash without giving up access or switching banks.”
The key is recognizing that not every dollar in a checking account needs to be immediately available. By moving unused balances into higher-yield options between payment cycles—and pulling them back when needed—practices can strengthen financial health without disrupting operations.
“LiaFi makes that possible,” Hrovat says.
For physicians navigating unpredictable reimbursements, rising costs, and growth decisions, practical cash-flow management is no longer optional. With disciplined processes, better visibility, and smarter use of idle cash, practices can reduce stress, improve resilience, and build a stronger financial foundation for the future.
For more information, visit liafi.co.
Image Source: ID 145584679 ©
Wrightstudio | Dreamstime.com
Daniel Casciato is a seasoned healthcare writer, publisher, and product reviewer with two decades of experience. He founded Healthcare Business Today to deliver timely insights on healthcare trends, technology, and innovation. His bylines have appeared in outlets such as Cleveland Clinic’s Health Essentials, MedEsthetics Magazine, EMS World, Pittsburgh Business Times, Post-Gazette, Providence Journal, Western PA Healthcare News, and he has written for clients like the American Heart Association, Google Earth, and Southwest Airlines. Through Healthcare Business Today, Daniel continues to inform and inspire professionals across the healthcare landscape.
