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

2. 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

3. 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

4. Accounts Receivable and Daily Bookkeeping
Manual Accounting – The Ledger Card

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

6. 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

7. 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

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

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

10. 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

11. 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

12. 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

13. 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

14. 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

15. 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

16. 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
Consult previous purchase orders for order numbers

17. 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

18. 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

19. 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

20. 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

21. End of Presentation