Did you know that there are 6,146 hospitals in the United States? Do you work at one of these hospitals and you're trying to avoid common bookkeeping mistakes?
In this article, explore the top bookkeeping mistakes you'll find at hospitals and other locations. Read on to learn what to avoid, how to avoid it, and how to ensure that you're bookkeeping as necessary at the hospital!
1. No in-Depth, Routine Reporting
First, make sure that the cash flow forecasts are promising for growth. Keeping medical documentation is vital for hospitals to keep track of finances.
Make sure that the balance sheets are kept up-to-date. When you don't keep routine reporting, you're allowing more unknowns to occur.
2. No CPA
CPA's are professionals of tax rules and regulations. This is to avoid any problems with the IRS, and ensure that everything at the hospital is working smoothly.
3. Hiring Bookkeepers With No Experience
Avoid hiring bookkeepers who don't have experience. You'll want someone with experience to ensure that everything stays organized, and books are set up correctly.
4. Misstating Allowances
When a hospital provides services, the procedure or supply is attached to the standard charges. They're then entered into the financial accounting system.
Commercial insurers and 3rd party payors only pay part of the hospital's charge. Payors now have their own fee schedules that can vary. This is to offset any receivables.
Choose a revenue cycle to avoid this. This will allow you to track payments received, allowances, billing, and any other financial data.
You can then look back over a period of time and see how much for every dollar they receive based on charges to the payor. This then leads to the CFO of a hospital to be able to estimate allowances and hard data.
5. Outstanding Checks
As a hospital employee, you're aware of the many checks you write. This can be due to overpayments for health insurers or patients.
This can lead to outstanding checks which decreases to your cash balance on a balance sheet. Every state varies when it comes to unclaimed property.
Unclaimed property is where an amount is owed to an individual, but they can't be found. When this occurs, the money must go over to the state. The state will then be in charge of finding that person.
It's a good idea to have different procedures and policies in place to stay organized and be aware of any checks or credit balances. Outstanding checks can add up over time if you don't keep track of them.
This means it'll be harder to straighten them out moving forward. After this happens, the department of revenue then sends out an agent who will audit your bank activity for these outstanding checks. They can be fines that go to credit balances in accounts receivable.
6. No Accountability
If you don't have resources in place, credit balances can add up fast. It's important to keep track of credit balances, such as if a patient passes away. You need someone working for you who will be dedicated to speaking with patients and fixing delinquent payments.
7. No Communication
Effective bookkeeping includes hiring a professional who will communicate with you through the process. It's vital since this is what will decrease errors and ensure everyone is on the same page.
If you give someone a bonus, you'll want to let the bookkeeper or CPA know. Any supplies that you buy you'll want to let them know as well.
8. Doing It Yourself
It's a bad idea to try to do it yourself since you're not a professional CPA or bookkeeper. A professional will have the skills necessary to ensure that you receive the correct requirements.
They'll also know about any tax changes that can occur. It can save time and money in the long run.
Choosing an Accountant
Choose an accountant who has experience working in your field. For example, if you're at a hospital, choose an accountant with healthcare experience. This is especially important when filing taxes for medical expense deduction.
You'll also want someone who is proficient in the different types of software you use. Or, will be able to pick it up quickly.
Signs You Have a Good Accountant
Do they return your calls when you ask them to? It should never be more than 24 hours unless it's an emergency.
Find out as well if they have referrals for other professionals. For example, say you need an attorney, do they know of good attorneys in the area?
It's also a good sign if they have experience in your industry. For example, if they have experience in car accounting that can vary from healthcare.
Signs You Have a Bad Accountant
Does your accountant not record your liabilities correctly? You'll want one who properly documents your current financial statement.
Do they charge you a high price and don't break down the price of different items? You should receive a proposal for every service before you even begin. There should be no secret charges.
Before doing anything, they should let you know about any unexpected costs. If they don't do this, you might have a bad accountant for your business.
Avoiding Bookkeeping Mistakes at Hospitals
Now that you've explored all about bookkeeping mistakes at hospitals to avoid, you should have a better idea of how to avoid them in the future. Remember that having a high-quality accountant or bookkeeper is necessary for the success of the business.
Would you like to read more medical content? For everything from health education to medical technology, check out our other articles today.