The overhead ratio is the number that runs the clinic
Overhead as a percentage of billings is the single figure that decides whether a clinic owner is building something or subsidizing it. It moves for reasons a bank statement never shows: a receptionist hired for a growth that stalled, an EMR contract renewed without negotiation, exam rooms sitting idle two afternoons a week. As your Fractional CFO, we hold that ratio up monthly, split fixed costs from variable ones, and trace every change to a decision someone can actually make.
The discipline matters more in medicine than elsewhere for a blunt reason: revenue per service is set by the OHIP schedule, not by you. When prices are fixed, cost structure and capacity are the only levers left, so they deserve real instrumentation. All of it feeds from clean monthly books; the reporting side lives in End-to-End Accounting, and the decisions live here.
Staffing is the biggest line and the hardest set of calls
Payroll is most clinics' largest controllable cost, and every staffing decision is really a capacity decision. A fully loaded hire costs well beyond the offer letter once the employer's CPP and EI, vacation and onboarding time are counted, so we model each role against the capacity it creates: a nurse practitioner is a salary line measured against the physician hours it frees; a second administrator is measured against evenings you stop doing paperwork.
Associate physicians are the sharpest version of the question. The split has to leave the clinic whole after the incremental staff, supplies and room time the associate consumes, and the room has to exist at the hours patients want. We build that model before you advertise the position, not after the split is promised.
| Decision on the table | What we model |
|---|---|
| Bringing on an associate physician | The split the economics support, room capacity by hour, incremental staff and supply cost |
| Adding a nurse practitioner or RN | Fully loaded salary against the physician time it frees and the visits it adds |
| New diagnostic equipment | Payback with the 13% HST as part of cost, Class 8 CCA, financing against cash |
| Leasing versus buying clinic space | Cash flow, financing structure, and which entity should hold the property |
Cost-sharing groups: split the rent without buying an HST problem
Most multi-physician clinics share space, staff and equipment, and the structure of that sharing has a tax consequence hiding in it. If one MPC employs the staff and charges the others a management fee, that fee is a taxable supply: 13% HST on top, which none of the exempt practices can recover. Across years of rent and payroll that is a permanent leak paid for nothing.
Done properly, the group operates as a genuine cost-sharing arrangement, with one party acting as agent for the others so shared costs pass through at cost, a structure the CRA recognizes in its policy on payments within medical practice organizations. The difference between the two is documentation and conduct, not intention, so we put the agency agreement, the cost allocations and the bookkeeping in writing before the CRA asks anyone to produce them.
Capital, credit and the clinic's next move
Growth decisions land better when the financing is designed rather than accepted. Banks compete hard for physician lending, which means the constraint is rarely access to credit; it is choosing the structure, term and covenants that fit a clinic whose receivable is a government that pays monthly. Walla Assaf spent years in banking and corporate finance before founding Tauro, and our Business Financing Advisory work packages the request the way a lender's own analyst would build it.
The same forward view covers the moves that change the clinic's shape: taking over an adjacent unit, buying the condo the clinic sits in and deciding which entity should hold it, or absorbing a retiring colleague's panel and the staff that come with it. Each one becomes a model with your numbers in it, a recommendation, and a decision made on paper before it is made with money. That is the brand promise in practice: your accountant files your taxes; we help you decide.
Fractional means sized to the clinic: a monthly reporting rhythm and a standing seat at your decisions, quoted in writing after a free 15-minute discovery call. Most of our physician CFO work runs across Mississauga and the GTA, in person or remote.
