Medical Office Administration 2nd edition

1. Medical Office Administration2nd edition Brenda A. Potter, CPC

2. Chapter 13 Financial Management

3. Bookkeeping and Accounting Procedures • Assistant will likely be involved in some financial aspect of the practice • Accountant will be hired due to complex nature of managing finances • Bookkeeping – recording financial transactions • Single entry – pegboard systems • Double entry – system of checks and balances • Accounting – developing and analyzing financial reports

4. Financial Reports • Computerization saves time and can provide different reports instantly • Income statement – profit-and-loss report • Balance sheet – practice’s financial condition (assets, liabilities, capital)

5. Accounts Receivable • Charges and payments on patients’ accounts • A change fund needed for patients who pay in cash • Overpayments will appear as credit (negative) balance • Credit balance reimbursed or applied to future charges • NSF check – check returned for nonsufficient funds

6. Receiving Payments • Payments made in person or through mail; usually personal check or charge • Receipt completed for payments made in person

7. Restrictive Endorsement

8. Deposits should be made on a daily basis Deposits

9. Petty Cash • Fund used to pay for incidental office expenses • Separate from change fund used for cash payments • One individual responsible for petty cash • Reimbursed by totaling expenses and writing check for that amount

10. Accounts Payable • Payment of expenses and items purchased by office • Purchase orders – used to authorize purchase of item • Checks – completed in check-writing system or computer system

11. Bank Account Reconciliation • Ensures checkbook balance agrees with bank balance • Completed monthly

12. Business Record Retention • Insurance policies and financial records kept until statute of limitations expires • Statute of limitations varies from state to state