Medical Assistant Chapter 20 Accounting And Bookkeeping

Front 1

Defining Accounting

Back 1

*Accounting is a system of:
-Recording
-Classifying
-Summarizing financial transactions

*Bookkeeping is the daily recording process of accounting

*Accuracy and completeness is essential

(Example: billing, reporting, taxes, payroll, budgets, etc)

Front 2

Terms to Know

Back 2

*Accounts payable(A/P)-debt not yet paid
*Accounts received(A/R)-money owed to business/owner
*Assets-property or estate that is subject to the payment of the debts
*Disbursements-money paid out
*Fiscal year-twelve month accounting period
*Invoice-statement of amount due
*Liabilities-something owed; debt
*Statement-request for payment

Front 3

Accounting Bases

Back 3

*there are 2 types of accounting bases
*the 1st is a cash basis- charges entered as the income when the payment is received
*expenses are recorded when they are paid
*2nd style-acquiral basis of an account-income is considered when services are performed even though the payment has not been made
*expenses are then recognized when inquired even though not paid

Front 4

Financial Record Summaries

Back 4

*Financial summaries should give an accurate statement of:
-How much was earned?
-How much collected?
-How much owed?
-The distribution of the expenses

*With proper software these tasks become simplified and reporting can be accustomed to specifics on request

Front 5

Bookkeeping Guidelines

Back 5

*The old style of bookkeeping required excellent penmanship
*Today accounting software requires data entry accuracy(i.e. transported number, decimal location incorrect)
*Post all charges and payments daily
*Checks should be stamped for deposit upon receiving
*All cash and checks deposited daily
*Check all statements for accuracy prior to payment
*Bills paid on regular basis, before due dates
*Reconcile bank statement monthly

Front 6

Daily Journal

Back 6

*A financial diary of daily transactions
-Services rendered(CPT, other)
-Charges(cost)
-Deposits(insurance checks)
-Payments(bills, invoices)

Front 7

Disbursement Journal

Back 7

*Simplified accounting system of registering information either manually or by computer for tracking purposes
*Commonly known journal-check register
*Information listed is:
-Date and check number
-Amount of check
-Purpose of payment

Front 8

Petty Cash Records

Back 8

*needs to be a policy put in place
*needs close watch over
*small amount of cash that is used for unpredictable spending
*could be for postage, parking, emergency supplies, orchange for the customers
*the funds need to be repunished as necessary, not something that has to be done on a everyday basis or on a weekly basis
*a check for cash should be written and entered as miscellaneous within the check registery
*1 person should actually be in charge of the particular fund
*a register and receipt should be available to count the full amount of money of cash that should be in the petty cash fund at any given time
*office should have some type of policy in place for handling petty cash fund and how they will be repalced
*

Front 9

Single Entry

Back 9

*Oldest and simplest and requires very little training
*Consists of 3 basic records
1. General journal(daily log, day sheet, charge journal, ect)
2. Cash payment journal(checkbook)
3. Accounts receiveable ledger(amount owed by patients)

*Each entry is made separately
*There are no built in controls
*Errors are not easily found
*Timely process for summarizing information

Front 10

Double Entry

Back 10

*Based on this accounting equation:
Assets=Liabilities+Proprietorship(Captial)

*This equation requires that both sides always be in balance(reason for calling it double entry system)

*The double entry system provides a more comprehensive analysis of the practice

*There are built in accuracy controls

*Usually handled by an experienced accountant

Front 11

Understanding the Formula

Back 11

Assets=Liabilities+Proprietorship(Capital)

*Assets-property owned by business(bank accounts, buildings, equipment, furniture, etc)

*Rights to this assets are called equities

*Proprietorship(capital)-equity of the owner

*Liabilities-creditors to whom money is owed(debt)

*Equipment purchase of $1500 Asset

*Down payment $250 Capital(equity)

*Debt owed $1250 Liability

Front 12

Write-It-Once System

Back 12

*is a system that is also referred to as apaintboard system
*may be utilized by small practices and more rural practices that are out there
*it invovles the use of a maserette board with a row of pegs(side, top or bottom)8.5x11 or 8x14 (daily journals, encounter tickets, ledger cards)
*daily journal records-runs charges for receipts for the day with monthly/yearly balances that are formed at the bottom
*each patient will have their own ledger card with their information on it
*encounter tickets-records services, payments, and adjust balances due-run in a # order
*summarization across the bottom that allows you to summarize whats been collected, and where they stand for the year

Front 13

Invoices & Statements

Back 13

*An invoice describes the item or service and amount due
*A statement is the request for payment
*All invoices should be reviewed prior to payment
*Packing slips should be checked for receipt of all listed items

Front 14

Making the Payment

Back 14

*Compare statement amount with invoice amount for accuracy
*Document the check number, date and amount paid on invoice and file
*Watch for special financial options, usually on larger purchases
*Examine statement for late fees, interest on unpaid balance

Front 15

Recording Disbursements

Back 15

*Usually done within the check register
*Important to keep business and personal expenses separated
*There may be specific expense account entries that have to be registered(auto, equipment, salaries, travel, marketing, utilities, etc)

Front 16

End of Day Summary

Back 16

*Making sure everything balances
*Reports can be created to verify:
-All services are billed
-Money received and posted(by employee)
-Transactions transmitted to insurance companies
-Daily payments, refunds, and deposits

Front 17

Cash Flow Statement

Back 17

*cash you have on hand
*it list the cash that has been received and disbursed over a period of time

Front 18

Trial Balances

Back 18

*should be done at least once a month after all posting of the accounts have been done
*manually done to determine whether there were any distructive done between the journal and the ledger
*it can be electronically done to show an overview of what the business current finace actually is-depends on what access you have

Front 19

Accounts Receivables

Back 19

*Amount owed to practice(patient or insurance)
*Aging analysis(60,90,120 days)
*Report needs to be worked on a regular basis
*Usually a large dollar value associated with A/R

Front 20

Statement of Income & Expenses

Back 20

*Also known as the Profit and Loss report
*A statement listing all of the income received and all expenses paid over a period of time
*Gross Income-total earning
*Net Income-earnings after expenses

Front 21

End of Month

Back 21

*Each individual will have their own way of how they want their information viewed
*With accounting software reports can be specialized to suit the needs of the requesting individual
-Specific period of time(day, month, quarter, annual)
-By title or category(insurance, last name, adjustments)
-Amount owing(small balance)

Front 22

Fiscal Year

Back 22

*A fiscal year is any 12 month period of time
*Combination of all reports compiled into an annual summary
*Information can be used for tax purposes and budgets

Front 23

Locating & Preventing Errors

Back 23

*Locate your original documents used to acquire information for posting transactions
*Step by step, srocc refernce each piece of information
*Use a fresh site of eyes, Ask for help!
*Use care when entering information
*Remember. "Haste Makes Waste"