Not sure what medical bookkeeping is? Don’t sweat it, just reconcile the books against the bank account and 90% of docs won’t know the difference. Reports get generated. Bills get paid, Taxes get filed. People go home happy. 👍
That’s good enough, right?
Medical bookkeeping isn’t just bookkeeping for the medical industry. It isn’t just knowing that a purchase order from McKesson or Henry Schein is likely a medical supplies expense versus Allergan or Galderma cost of goods/services. It isn’t just understanding the difference between providers with production versus administration and commissions calculations versus step/progressive tier versus salary or hourly wages. There is a lot more that goes into knowing a medical practice and their books than it may seem at first glance.
So how do you get from being overcharged by an industry agnostic CPA to mark up their bookkeeper’s rates or a mom/pop shop who had an aunt that was a manager for a family practice doc 10 years ago? How did we get from pretending to be decent to great? Here’s what you need to know.
Understanding Nuances of Bookkeeping in Healthcare
Raise your hand if you know what a reconciliation is? 👋
🌟🌟 (that’s two gold stars) If you know the difference between a month-end rec and a daily rec. Also, if your bookkeeper doesn’t call a reconciliation a rec, are they even cool enough to work with you? Chances are you’re lost right now. Amiright?
FYI – A rec is a reconciliation of payments…meaning I’m matching what is in my cash drawer, check deposit and credit card terminal batch summary report, against what I have in my computer system (typically a practice management/electronic health record/electronic medical record system AKA PM/EHR/EMR).
OR it can mean I’m reconciling my bank account against my accounts payable system…usually Quickbooks, but we’re not picking favorites…I actually prefer Xero myself.
One should be done DAILY (e.g., daily rec) and one MONTHLY (e.g. monthly or traditional rec).
QUICK QUIZ TIME: Did you catch the one bit in the above workflow that is going to be unique to medical? That’s right…the PM/EHR/EMR.
Medical billing/bookkeeping is the ugly redheaded stepchild of all things financial because it needs to reconcile multiple systems between the patient, the insurance company, the EMR and the accounting system…oh yeah and the bank account.
A specialty company like Auctus Group can help. We know that you need to do a daily reconciliation of patient/insurance payments to patient accounts (by patient) and then match deposits by payment type against the accounting system. ⬅️ send this sentence to your bookkeeping expert(s) and ask if they’re even trying to match your bank to your PM/EHR/EMR…I’ll bet you a bottle of wine they aren’t 🍷🍷🍷
So what if they don’t? Well, you really have no way of telling if cash is walking, or if your team isn’t posting correctly, or if you’re collecting all the money you should be. Oh and your reports might be wrong and you lose optics into your actual numbers. So NBD.
Attention to Detail is Key
Healthcare payments aren’t as simple as “check please.” Patients may pay for services at the time the service is rendered. Or patients may make a deposit for a package of future self-pay services. Or a patient may pay a copay or a deposit for surgery up front. Insurance companies take forever to pay (like 30-60 days). Patients also have to pay after the fact half the time (AKA most of the time). If your bookkeeper isn’t in your PM/EHR/EMR, how can they help you predict cashflow accurately?
Patients might receive discounts for some treatments if they belong to a rewards program through aesthetics companies like ALLE and Aspire. For regular aesthetic treatments such as JUVÉDERM® or SkinMedica®, these loyalty companies may provide discounts to members. 🏆 So if the patient thinks they’re paying 100%, but its really only 80%, but the provider gets the other 20% in one lump sum for all the patients at the end of the month…how do we account for that? No seriously. How does the bookkeeping work? Do we post the $80 bucks at date of treatment and then leave an adjustment for the $20…and then back that out at the end of the month after we reconcile the bulk deposit from Allergan/Galderma? Do we just post $100 bucks and forget about it?
What about companies like Carecredit and Alphaeon Credit who pay the practice the sum, less their cut? Do I post a payment in the amount of the charge in the EMR and a debit + credit in the accounting system per transaction or do I run a journal entry at the end of the month for the delta? Confused? Me too…and I do this for a living.
We mentioned there are levels to this right?
Knowing your vendors
It matters. McKesson isn’t always medical supplies…you may buy devices there as well. Oh, and does your bookkeeper know what a GPO (Group Purchase Organization) is and/or how to keep an eye out to make sure you’re getting your discounts? Allergan isn’t just Botox…could be implants this time? What about your processing partner? When was the last time your rates were re-negotiated/re-priced? Ask us about repricing with our partner Payroc.
Improving Bookkeeping at your Practice
At Auctus Group, we’re not just doing bookkeeping better. We’re developing automations ⚙️ and rule-based logic that will help your practice be more efficient (like Clockwork.ai – an AI drive FP&A software we love). Check it out: the less time you spend on bookkeeping, the more time you can spend invoicing, which means you’re making more money. Our process is to not only provide better services, but to build in rule sets and better processes to CUT DOWN OUR OWN TIME. Although we may not make as much money as if we did it the old fashioned way by doing everything manual and cutting the PM/EHR/EMR corner…we figure if we do more, faster, and our clients actually save money…it’s kinda like as good as it gets right?
Bookkeeping is a time game⌚, and it’s a game we know well. Set up an appointment today and learn how Auctus Group can help provide better bookkeeping services for doctors and practices….actual Medical Bookkeeping.