Y khoa - Dược - Chapter 21: Financial management

21Financial ManagementLearning Outcomes (cont.)21.1 Summarize the importance of and how to establish good bookkeeping and banking practices.21.2 Compare single-entry, double-entry, and write-it-once bookkeeping systems. 21.3 Outline patient related financial transactions.21.4 Identify negotiable instruments and the items that must be present for a check to be negotiable.Learning Outcomes (cont.)21.5 Describe the different types of check endorsements and the steps in creating a bank deposit.21.6 Carry out the process of reconciling the office bank statement. 21.7 List several advantages to electronic banking.21.8 Implement setting up, classifying, and recording disbursements in a disbursement journal.Introduction Medical practices require sound financial management Employees must understand financial management proceduresThe Medical Practice as a BusinessTo succeed - income must exceed expenses. Accounting Responsibilities of medical assistantBookkeeping ~ a systematic record of business transactionsBankingThe Medical Practice as a Business (cont.)AccuracyStrive for 100%Records form a chain of information Errors can result inDouble billingOmitting bank depositsImproper payments to suppliersEstablishing Procedures Be organizedBe consistentUse markersWrite clearlyCheck your workApply Your KnowledgeANSWER: Errors can result in billing a patient twice for same service, omitting bank deposits, and making improper payments to suppliers.What can be the result of errors in billing?Medical Office Accounting MethodsComputerized – most commonManual SystemsSingle-entryDouble-entryPegboardAll methods recordIncomeCharges DisbursementsOther financial information$$$$Electronic BookkeepingBookkeeping on the computerPerforms same tasks as manual method Saves timePerforms repetitive tasksPerforms math calculationsHas built-in tax tablesManual Bookkeeping SystemsSingle-entry Transaction listed once each toPatient ledgerDaily logCheckbookDisadvantages Not self-balancingDoes not detect errors as readily Manual Bookkeeping Systems (cont.)Double-entry Transactions are listed twiceAssets = Capital + LiabilitiesAs payments are made on the asset both side of the equation continue to balanceExample: Asset - $15,000 ECG machineCapital = amount of total cost paidLiability = the amount still owed$15,000 = $5000 + $10,000Manual Bookkeeping Systems (cont.)Write-it-once (pegboard) systemEntry written one timeDaily log sheetPatient ledger cardCharge slipManual Bookkeeping Systems (cont.)Daily logChronological list of charges, payments, and adjustmentsJournalizing Post from the log to patient ledgerManual Bookkeeping Systems (cont.)Patient ledger cardPatient informationFinancial transactions of patient accountPayments AdjustmentsBalance owedInformation from daily log Manual Bookkeeping Systems (cont.)Accounts receivableTotal owed to the practiceTotal on accounts receivable = balances on patient ledger cardsAccounts payableAmount owed to vendorsKeep accurate records $$$Manual Bookkeeping Systems (cont.)Record of office disbursementsList of payments made Information on recordPayee DateCheck numberAmount paidType of expenseManual Bookkeeping Systems (cont.)Summary of charges, receipts, and disbursementsComparison of income and expensesAnalyzing summaries Areas of profitabilityAmount charged and payments received Cost of running the officeCategories of expenses$$$Apply Your KnowledgeWhat types of bookkeeping methods might you use in a medical office?ANSWER: You might use these bookkeeping systems in a medical office:Single-entry Double- entry Pegboard In Office Patient TransactionsStarting the Business DaySet up peg board with daily log sheetLayer superbills Patient Process – ledger card under next superbillAttach the Superbill to the Patient ChartIn Office Patient Transactions (cont.)Patient Checkout – place superbill and ledger card on appropriate space of daily logPayments After the Patient VisitRecord payments appropriately Make adjustments as requiredIn Office Patient Transactions (cont.)Returned Checks Add back to patient balanceAdd bank feesOverpayments End of dayTotal columnsCorrect errorsApply Your KnowledgeMr. Adams check does not clear because of non-sufficient funds. What adjustments do you make to his account?ANSWER: The amount of the check is added back to the patient’s balance. A fee for the returned check as well as any fees incurred as a result of the NSF check may also be added to the patient’s balance.Banking and Negotiable Instruments Banking tasksWriting checksAccepting checksEndorsing checksMaking depositsReconciling bank statementsChecksBank draft or order for paymentNegotiableSigned by payerAmount to be paidPayable to payeeDated Name of bankChecks (cont.)Cashier’s check – issued by bankCertified check – money certified availableVoucher check – stub for record keepingLimited check – time limitedChecks (cont.)Counter check – withdrawalsTraveler’s check – established denominationsMoney order – guaranteed paymentChecks (cont.)Check codesABA numberFraction on upper edge Geographic area and bankMagnetic ink character (MICR) code Numbers and characters Read by computerChecks (cont.)PayerDate lineCheck number ABA numberPayee Amount boxAmount lineChecks (cont.)Bank informationMemo line Payer signature lineRouting numberAccount numberCheck numberMICR recording areaChecks (cont.)Accepting checksReview check before accepting itThird-party checksChecks marked “payment in full”Power of attorneyChecking AccountsPersonalBusiness ~ office expensesInterest-earning ~ for special expensesApply Your Knowledge What is a negotiable instrument? ANSWER: A negotiable instrument is a check that is legally transferable from one person to another. A check must:Be signed by the payerInclude the amount of money to be paidBe made payable to the payee or bearerBe made payable on demand or on a specific dateInclude the name of the bank that is directed to make payment.Preparing a Bank DepositEndorsementBlank ~ payee’s signatureRestrictive ~ specifies “for deposit only”Special ~ third-party endorsementQualified ~ used byattorneysPreparing a Bank DepositEndorsementEndorse immediately Endorse in appropriate placeEndorse in ink or use stampCompleting the Deposit SlipPost the payment to the patient ledger cardPut the check with others to be depositedFill out a deposit slip BWW Medical Associates, PC305 Main St.Port Snead YZ, 12345-9876xxMaking the DepositMake deposits in personObtain deposit receiptElectronic Deposits – Electronic funds transfers (EFTs)Apply Your Knowledge What are the types of check endorsements? ANSWER: There are four principal types of endorsement:Blank endorsement - simply the payee’s signature. Restrictive endorsement – specifies how the check may be redeemed. Special endorsement – a third-party endorsementQualified endorsement – used by attorneys, who may accept a check on behalf of their client, Reconciling Bank StatementsReconciliation Comparing the office financial records with the bank statementEnsure that they are consistent and accuratePerformed once a monthReconciling Bank StatementsBank StatementCheckbookBalance10,900.0012,600.00(deposit)+ 2,000.00(auto-pay)- 500.0012,900.0012,100.00(Outstanding- 800.00checks)12,100.00Apply Your KnowledgeHow do you reconcile a bank statement?ANSWER: You compare the office financial records (checkbook or disbursements journal) with the bank statement to be sure they are accurate. In the checkbook, you should mark all items that have cleared the bank to be sure all are accounted for. Once outstanding checks are subtracted from the bank’s balance it should match the checkbook balance.Electronic BankingAdvantages - improves productivity, cash flow, and accuracyTraditional BankingElectronic BankingYou record each check and determine new balanceComputer calculates new balanceYou reconcile office bank statementComputer reconciles the statement automaticallyYou lock up banking materials at end of dayYou use computer password for security Electronic Banking (cont.)Computer software willRecord depositsPay billsDisplay checkbookReconcile the bank statementCheck bank’s safeguards Electronic Banking (cont.)Record Deposits  Enter each depositPrint deposit slipPay billsLog checksElectronic bill payDisplay checkbookVerify checks Check withdrawals and depositsCheck balanceElectronic Banking (cont.)Balance checkbookProgram displays checks and depositsMark those appearing on the statementEnter balance from statementProgram performs the reconciliation Apply Your KnowledgeWhat are the advantages of electronic banking?ANSWER: Electronic banking improves productivity, cash flow, and accuracy. Computerized banking programs facilitate recording deposits, paying bills, displaying the checkbook and reconciliation of the account. Accounts Payable and Managing DisbursementsThree types: Payments for supplies, equipment, and practice-related products and servicesPayroll TaxesDisbursementsPayments for goods or servicesRecording disbursementsSet up disbursement journalEnter check information and amountDetermine expense categoryDisbursementsRecord check amount under appropriate categorySplit amount if necessary and enter total in check amount columnWriting ChecksAccount balance must cover the check Enter on disbursement log then write checkHave the doctor sign the checkMark invoice with date, check number, and amount paid; place copy in fileMail checkWriting Checks (cont.)Disbursement logTotal and track expenses by categoryCheck calculationsTracking Look for changesHelps control expensesUnderstanding Financial SummariesStatement of income and expenseCash flow statement – shows money available to cover expensesTrial balanceCheck periodicallyExpenses should matchamount in check columnApply Your KnowledgeHow do you record disbursements in a disbursement journal?ANSWER: To record disbursements:Enter check information and amountDetermine expense categoryRecord check amount under appropriate categorySplit amount if necessary and enter total in check amount columnIn Summary21.1 Procedures to be established to help maintain consistency in financial practices include being organized and consistent. Write clearly and use markers to keep track of your current location. Check your work frequently and correct any errors using the approved. All entries must be kept readable at all times. Finally, keep all figure columns straight so that decimal points line up. Following through on these procedures can help ensure that your work will be concise and accurate. In Summary (cont.)21.2 The single-entry accounting system, where an entry is written once on the patient ledger, on the daily log,  and in the checkbook, contains no checks and balances for accuracy. The double-entry system, based on assets = capital & liabilities, has checks and balances, but can be cumbersome and complicated. The write-it-once system allows all transactions to be recorded in one procedure, using carbonless forms on all necessary documents. Many computerized office management software packages are based on the write-it-once concept.In Summary (cont.)21.3 Patient related financial transactions include starting the day, patient process, attaching the superbill to the patient chart, patient check out, after visit payments, returned checks, refunds, uncollectable accounts, and end of day procedures.In Summary (cont.)21.4 A negotiable instrument is one that is legally transferable from one person to another. To be negotiable a checkmust be written and signed by the payer or maker, include the amount of money to be paid, be made payable to the payee or bearer, be made payable on demand or on a specific date, include the name of the bank that is directed to make payment.In Summary (cont.)21.5 The types of check endorsements are blank, restrictive, special, and qualified. To make a bank deposit, follow the steps outlined in Procedure 21-5.21.6 Following the guidelines outlined in Procedure 21-6, the student should successfully be able to reconcile a mock bank statement with a mock office checkbook.In Summary (cont.)21.7 The computer software calculates each new balance, reconciles the monthly bank statement automatically and a computer password and security system is used to keep the information safe and confidential.21.8 Following Procedure 21-7, the student should set up a mock disbursements journal consisting of several columns of expenses. Once set up, given a list of several “bills” to be paid, the student should document the check information and record the disbursement amount in the correct column(s) of the journal.End of Chapter 21Never spend your money before you have earned it.  ~ Thomas Jefferson