Comprehensive Medical Assisting, 3rd Ed Unit Three: Managing the Finances in the Practice Chapter 12 – Accounting Responsibilities

Accounts Receivable and Daily Bookkeeping Bookkeeping style Single entry – each transaction is posted once Double entry – each transaction is posted twice: As a debit on one side and a credit on the other Keep the equation balanced: Assets = Liabilities + Equity Basis Cash basis – posted as money comes in and bills are paid Accrual basis – posted as services are rendered and bills are tendered

Accounts Receivable and Daily Bookkeeping Manual Accounting The pegboard system The day sheet The ledger card The encounter form and charge slip Posting a charge Posting a payment Processing a credit balance Processing refunds Posting a credit adjustment Posting a debit adjustment

Accounts Receivable and Daily Bookkeeping Manual Accounting – The Ledger Card

Accounts Receivable and Daily Bookkeeping Manual Accounting – The Encounter Form and Charge Slip

Accounts Receivable and Daily Bookkeeping Computerized Accounting Centralized storage with distributed access, input, and output Automatic calculation of totals and balances Check writing and electronic banking Coordination with appointments, claims submission, and so on

Accounts Receivable and Daily Bookkeeping Computerized Accounting – Posting Analogous to a manual system Calculation and many input errors are avoided Local codes are automatically transcoded Computerized Accounting – Reporting Daily, weekly, monthly, year to date (YTD), and yearly reports Trial and final reports Subsidiary reports

Banks and Their Services Types of Account Checking Savings Money market Bank Fees Monthly service fee Overdraft protection Returned check fee

Banks and Their Services Types of Check Standard business checks Certified checks Cashier’s checks Traveler’s checks Money orders

Banking Responsibilities Writing Checks for Accounts Payable Signature card on file required Manual writing Type or write legibly Complete all fields, including the memo Record in the register and record the new balance Post to the general ledger in the appropriate account Computerized writing automates most of these steps

Banking Responsibilities Receiving Checks and Making Deposits Endorse checks with the office name and account number Total checks and cash received Check the total against the day sheet Prepare a deposit slip and deliver it to the bank

Banking Responsibilities Reconciling Bank Statements Compare your records to the statement All checks and deposits listed? All amounts correct? Run a reconciliation balance Do your numbers balance? If not, where is your math incorrect? Post any necessary adjustment

Petty Cash Maintained for small “spot” purchases Voucher every withdrawal with a receipt Sum of cash and vouchers is constant Replenish to full cash monthly Cash checks for the value of the vouchers File vouchers and replace them with checks Keep separate from patient cash payments

Overview of Accounting Regular review provides a picture of the practice’s financial condition and trends Accounting cycle may follow The calendar year, or An arbitrary fiscal year The IRS requires Quarterly tax estimates Annual tax return

Record-keeping Components Keep running records of Income, receivables, expenditures (by category, including payroll), cash on hand, and liabilities Systems are functionally identical Paper is slower but simpler Digital is faster but requires training Create monthly, quarterly, and annual reports of Payroll and expenditures Accounts and revenues Profit and loss

Accounts Payable Ordering Goods and Services Saving money Purchasing co-ops Volume buying Discount merchandisers Price is not the only important component; delivery and quality are also important Ordering By phone, fax, mail, or e-mail Consult previous purchase orders for order numbers

Accounts Payable Receiving Supplies Check contents against the packing slip and initial it Record any discrepancies Check the packing slip against the invoice before paying Post paid bills and invoices to an accounts paid file for current FY

Accounts Payable Paying Invoices Manual payment Record purchase details on the check and stub May be supplemented by a log Pegboard payment “One-write” system carbon copies to a register Expense category columns Computer payment “One-write” system Requires software- and printer-compatible checks Greatly facilitates calculation and reporting

Preparation of Reports Paying Invoices Manual and pegboard systems Subtotal and total income, expenditures, and payroll by category Transfer numbers to written report Computer system Automatically calculates totals and subtotals Provides wide variety of reports and formats

Assisting with Audits Save all Bank statements Copies of quarterly and annual tax returns Receipts for expenditures Cancelled checks Payroll records Copies and summary numbers may work for an informal audit A formal audit requires originals and raw numbers

End of Presentation