Bookkeeping and Accounting

Seminar 8

Billing & Collection Procedures

• Before we can deal with the money, we have to collect it first.

• Name some procedures a MOM would do to ensure there is money coming into the office?

Everyone please answer.

Bookkeeping and Accounting

• Just like any other business, a medical practice must keep accurate financial records!

• Why? - Everyone please answer.

• Things have changed a lot with the use of computers!

Bookkeeping• Bookkeeping is part of

an accounting system, not the system itself.

• Everyone, please give one example of something you would do in a doctor’s office that would be considered bookkeeping.

Accounting

A system of recording, classifying, analyzing, and summarizing financial transactions; this includes both money coming into the business and money going out of the business

Accounting terms

• Give an example of accounts payable. Everyone please post an answer.

• Give an example of accounts receivable.Everyone please post an answer.

Two Different Methods of Accounting

Cash method- income is recorded when money is received (income) and the expenses are recorded when the bill is paid (disbursements).

Accrual method-income is recorded when a service is performed or a product is sold, even if payment for the sale or service does not occur until later. Expenses are recorded at the time when a product arrives or a service is delivered to the business.

Bookkeeping Systems - Pegboard

Bookkeeping Systems – Pegboard

Form Masters, Inc. (1999-2011). Retrieved from http://www.formmasters.com/onewrite.htm

Bookkeeping – Single Entry

Date Description Revenue Expenses (Credit) (Debit)Jan 2 Patient Procedures 7,000.00

Jan 2 PO Blood Pressure 100.00Jan 4 Patient Procedures 5,000.00

January Totals 12,000.00 100.00

Bookkeeping Systems-Double Entry

Date Description Assets =Liabilities/Revenue+Capital

Jan 2 Patient Procedures 7,000.00 = 6,000.00 + 1,000.00 (Ins billed) (Co-pays)Jan 2 PO Blood Pressure 100.00 = 100.00

Jan 4 Patient Procedures 5,000.00 = 4,500.00 + 500.00 (Ins billed) (Co-pays) January Totals 12,100.00 = 10,500.00 + 1,600.00

Observation with Checks

Routing # on the left• Make sure correct date,

amount, and signed.• Ask for ID if you do not

know the person.• Only accept checks for

correct amount.• Only one endorsement

Account # next to routing number. Check # in upper R corner

Additional Information• The ABA number is number issued to each

bank for identification purposes.

10-4/2025 or 10-4 2025

The country is divided into 12 Federal Reserve districts.

7 Types of Checks Negotiable instruments

• Bank Draft• Cashiers check- drawn on from bank• Certified check- yours, bank seals as certified• Limited Check- only 30,60 90 days(payroll)• Money order• Traveler’s check• Voucher check- detachable voucher form

which specifies what check is for.

Online Banking

• Online banking is called e-banking• Protected by passwords.• Change passwords often on work computers

keep track of what they are.• Electronically deposited money is called direct

deposit.

Stop Payment

• When should you request the bank issue a stop-payment order on a check that you wrote in payment for a medical supply order?

TAXES

• What is a W- 2?

• What is a W- 3?

• What is a W- 4?

TAXES

• W - 2 Wage and Tax Statement – Employer must give to employees by January 31

• W - 3 Transmittal of Income and Tax Statement– Goes to the Social Security Administration by

February 28/29

• W - 4 Employee’s Withholding Allowance – Employee completes and gives to employer before

any paychecks issued

Summarizing the day - Daysheet

• Manual – write down everything that happened that day on a grid (p. 407)– Patient names– Charges– Payments– Running totals of accounts receivable for day, month, year

• Computerized – the computer does it all – but only if you entered the correct information!

• Why are daysheets important? Everyone please answer.

Daysheets

• At a glance the office manager can see if the practice is in the red or the black.

Marketing Strategies

• If the patient flow numbers are not where the office manager or physician wants them to be, what can you suggest?

Everyone please answer.

22

Final Project

There are three parts to this project:There are three parts to this project:• Part 1: Due in Unit 8Part 1: Due in Unit 8

• Bank Deposit Essay Bank Deposit Essay –– 35 points35 points • Bank Deposit Bank Deposit – 20 points– 20 points• Patient Ledger Patient Ledger – 20 points– 20 points

• Part 2: Due in Unit 9Part 2: Due in Unit 9• Bookkeeping Essay Bookkeeping Essay – 35 points – 35 points

• Part 3: Due in Unit 9Part 3: Due in Unit 9• PowerPoint Slides PowerPoint Slides – 40 points– 40 points

Download the following from the Unit 8 folder Download the following from the Unit 8 folder

in Doc Sharing:in Doc Sharing:• Final Project RubricFinal Project Rubric

• Bank deposit templateBank deposit template

• Patient ledger templatePatient ledger template

• Study Guide Page 286 Part IV (Deposit slip information)Study Guide Page 286 Part IV (Deposit slip information)• Study Guide Chapter 21 Page 256 (Patient ledger information)

Please be sure to view the instructions for the Final Project in the PowerPoint presentation located in the Unit 8 folder of Doc Sharing.

Final Project

Example of Bank Deposit – Credit card amount is not deposited!

Patient Name: Jorge RodriguezPatient Address: 55 Orlando Street

City: San Diego State: CA Zip Code: 92101 Home Phone: 760-588-2217 Cell Phone: 760-922-6893 Email: JorgR2@yahoo.com MR#: RODJ4857

Entry Date Reference Service Charge Payment Adjustment Previous Balance Current Balance

1 2/13/12 6630 NP/INJ $300.00 $75.00 0.00 $225.00 2 2/21/12 6635 Surgery $822.00 $50.00 $225.00 $997.00 3 3/27/12 Aetna 89501 $865.00 $150.00 $997.00 <$18.00> 4 4/2/12 Refund 4267 -$18.00 <$18.00> 0.00 5 6 7 8

Patient Ledger Example

Note: Refund amounts must be listed in the Payments column. Adjustments are write-offs or sometimes amounts added back in.

Final Project – Part 2 Bookkeeping Essay

All the information needed to complete this essay can be found in your text:

• Peg Board System – Chapter 21• Single Entry System – Chapter 23• Double Entry System – Chapter 23

Final Project – Part 2Bookkeeping Essay

Answer the following questions in essay form (minimum 300 words). Include this information:

• Research and describe the three types of bookkeeping systems.

• Which of the three systems do you think would be the easiest to work with in the medical office? (Peg Board, Single Entry, Double Entry) Why? Give at least two reasons.

Follow the Rubric!

Final Project - PowerPointThis presentation:

• Must contain a title slide with your name listed.• Must have five more slides (total six slides)• Is directed to the doctor. You are convincing the

doctor to have a Web site.• Should include reference citations

See Chapter 25 in your text for more information.

Follow the Rubric!