HOF clinic cash flow: receivables and inventory

Revenue is what the clinic sold. Cash is what it has to pay the bills today. In orofacial harmonization (HOF), the gap between the two is wide: the patient pays by card in 6 or 10 installments, the clinic buys the product upfront or on short terms, rent and payroll are due every month and part of the inventory may expire before it is used. Anyone who only looks at revenue discovers the problem when there is no money to pay the supplier, even with a full schedule.

This guide explains how to build a simple cash flow, what to do with card receivables, how inventory enters the picture and how to plan the coming weeks. The numbers in the examples are fictional. Accounting and tax questions should be handled with your accountant.

What is the difference between revenue, profit and cash?

A clinic can be profitable and run out of cash (when it gets paid late or holds a large inventory). It can also have cash and a loss (when it got paid upfront for a package that will still consume product and time). Cash flow tracks the third concept, and it has to be read alongside the other two.

How do installment cards affect cash?

Installments help the patient decide and commit to a plan. For the clinic, they change how the money arrives:

• Cash payment (Pix, debit): arrives quickly or within a few days.
• Single-payment credit: usually arrives within a short period set by the card processor, with a fee.
• Installment credit: the amount arrives in installments over the months, with a higher fee, or can be advanced at a cost.

You do the procedure today, pay for the product now and get paid over months. This creates a "receivables queue." If the clinic sells a lot in installments, the month's cash depends on what was sold in previous months, and this month's sales only become cash later.

Hypothetical example: fictional figures, not counting fees. A patient commits to R$ 3,000.00 in 6 card installments. The clinic spends R$ 1,100.00 on product and supplies that day.

In the first month, the treatment consumes cash. Only in the third month is the product "paid for" by the installments. If the clinic does many treatments like this, it needs working capital to bridge the gap. To simulate fees and net amount, use the installments and fees calculator and read installment payments for aesthetic procedures.

Is getting receivables in advance worth it?

An advance turns future installments into money now, at a discount. It can be useful in specific situations, but it has a cost and can become a habit. Before advancing:

1. Calculate the cost in reais, not only as a percentage. Different fees by term and by processor produce very different amounts.
2. Compare it with the margin of the treatment. If the advance eats a good part of the margin, the price is wrong or the installment term is too long.
3. Ask yourself why you need to advance: was it a planned investment or is cash always tight?
4. Avoid advancing to pay recurring expenses that the price should cover.
5. Review the terms with the processor and your accountant, including tax effects.

How does inventory fit into cash flow?

Inventory is idle money. You paid beforehand, and it only becomes revenue when it is used in a treatment and the patient pays. Slow-moving products and items near expiration are cash that is waiting and can be lost.

• Buy based on consumption, not on the supplier's discount. See injectables inventory in the HOF clinic.
• Know the turnover: how many days of inventory you have of each product.
• Measure the loss from expiration and leftovers and include it in the price. See pricing botulinum toxin by area.
• Match purchases to the schedule: packages and booked procedures show the consumption of the coming days.
• Use the syringe yield calculator to understand the real cost per patient.

How do you build a simple cash flow?

A spreadsheet is enough. The minimum structure:

Fixed and variable costs are detailed in fixed and variable costs of the HOF clinic. The key point is to record inflows on the date the money arrives, not on the date of the sale.

What about working capital?

It is the reserve that sustains operations between paying and getting paid. It depends on:

• the average collection period (how much revenue comes in installments);
• the inventory cycle (how many days product sits idle);
• seasonality, with weaker months. See seasonality in the HOF clinic;
• no-shows and cancellations, which cut revenue without cutting fixed costs. See no-shows in the HOF clinic;
• defaults, when there is direct or installment payment with the clinic itself.

Hypothetical example: a clinic has a monthly fixed cost of R$ 33,000.00. It decides to keep a reserve equal to two months of that cost, or R$ 66,000.00, as a cushion for weak months. If it has R$ 20,000.00 today, it knows it must build the rest gradually, with one rule: set aside a percentage of each good month, before adjusting withdrawals or investments.

The ideal amount varies by clinic; discuss it with your accountant. What matters is that working capital is a decision, not a surprise.

Do the owner's salary and withdrawals count?

Yes, and it is one of the points that most unbalances cash flow. Mixing clinic money with personal money makes it impossible to know whether the clinic is profitable. Good practices:

• Set a fixed owner's salary that fits the clinic's reality.
• Treat profit distributions as a periodic decision, after paying costs and setting aside taxes and reserve.
• Keep the clinic's account separate from your personal account.
• Avoid paying personal expenses from the company's cash.

It is also worth looking at the relationship with the tax regime, which your accountant can advise on. See Simples Nacional for the HOF clinic (Brazil's simplified tax regime) and individual or company in HOF.

Which indicators should you follow?

A few numbers, checked often, are worth more than many:

More indicators are in HOF clinic indicators.

How can you improve cash without losing patients?

• Adjust the installment policy: maximum number of installments, terms for packages, or a discount for cash payment, so that the clinic can sustain it. See discount requests and procedure packages in HOF.
• Reduce no-shows with confirmations, a cancellation policy and a waiting list. See the HOF clinic schedule.
• Review the price based on real cost. See pricing per ml.
• Concentrate purchases on what turns over and negotiate terms with suppliers.
• Plan deposits or down payments when a procedure requires reserving product, respecting consumer rules and those of your council.
• Schedule follow-ups and maintenance visits. See return visits and retention.
• Manage peak and slow dates: see year-end campaign in the HOF clinic and November and December schedule.

Common mistakes

• Looking at revenue instead of the forecast balance.
• Counting installment sales as available money.
• Buying large inventory for a discount without looking at turnover.
• Advancing receivables as a habit.
• Mixing clinic cash with personal money.
• Forgetting taxes, year-end bonus pay, vacations and renewals in the plan.
• Having no reserve for weak months.
• Reviewing cash flow only when the balance is negative.

Weekly checklist

• Did I update the balance and the inflows that actually arrived?
• Did I review outflows for the next 13 weeks?
• Do I know how much I will receive from cards over the coming months?
• Did I check inventory, expiration dates and planned purchases?
• Did I see how much I spent on fees and advances?
• Does the owner's withdrawal fit within the results?
• Is there a tight week I can fix now?

Cash flow does not need to be sophisticated, it needs to be up to date. With a simple spreadsheet, a 13-week forecast and attention to receivables and inventory, the clinic stops being surprised by its own cash and starts making pricing, purchasing and investment decisions based on numbers.