Upload
maryann-montgomery
View
215
Download
1
Embed Size (px)
Citation preview
Chapter 15
Financial Systems: Financial Systems:
Accounts ReceivableAccounts Receivable
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Bookkeeping Systems
• Two types of financial systems are used in the dental office.
• Accounts receivable (Chapter 15)
• Accounts payable (see Chapter 16)
• This chapter will deal with accounts receivable only.
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Accounts Receivable
• This is the amount of money that is owed to the dentist (incoming money).
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Accounts Receivable
• Includes all production
• Data are entered for:
• Treatment rendered to patients
• Payment received
• Calculations for new balances
• Computation of the data leads to determination of the amount of the current accounts receivable.
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Accounts Payable
• Includes all financial obligations, or money that is owed by the dentist (outgoing money)
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Financial Records
• Must be maintained for several reasons
• They provide:
• Protection for both the dentist and patient
• Information for tax purposes
• Data for business analysis
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Financial Records
• Bookkeeping
• The recording of financial transactions
• Accounting
• The recording, classifying, and summarizing of financial and business records
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Computerized Bookkeeping System• A computerized bookkeeping system can be
integrated into total records management. • A single entry can be transferred to a:
• Financial record• Patient statement• Insurance form• This information may be used to generate a
variety of management reports.
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Components of a Computerized Bookkeeping System• Opening the program
• Usually a user name and/or a password are needed
• Locating account information
• A main menu leads to other menus
• One menu is accounts
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Account Information Screen
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Components of a Computerized Bookkeeping System• Common account information includes:
• Name or ID number
• The provider
• Name, address, and telephone number
• Social Security number
• Date of birth, sex, and age
• Employment and insurance notes such as last update, last payment, etc.
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Components of a Computerized Bookkeeping System• Editing account information
• Information about existing patients will need to be edited if there are changes such as name, address, or insurance information.
• Adding a patient• An account will need to be created for a new
family.• A spouse or dependent is usually added to an
existing account because statements are usually sent to families.
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Patient Information Screen
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Components of a Computerized Bookkeeping System
• Posting transactions
• Clinical data are entered about treatment performed.
• A walkout statement and insurance claim form may be generated.
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Transaction Screen
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Sample Walkout Statement
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Components of a Computerized Bookkeeping System
• Backing up data
• Must be done to prevent loss of information
• Can be done using a CD-ROM, DVD, external hard drive, or some other type of storage device
• An offsite backup service using the Internet can also be used to back up data.
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Special Problems• Credit balance
• When a payment is made in advance • Nonsufficient funds (NSF) check
• Can try to resubmit• Often the bank charges the depositor a fee.
• Collection agency fee• Becomes a debit on an account
• Courtesy discount• Becomes a credit on an account
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Credit Balance Sample
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Nonsufficient Funds Example
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Courtesy Discount Example
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Debit and Credit Cards
• Debit/credit card transaction terminals are provided either by the software company for the computer system or from the dentist’s bank.
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Procedures to Enter Debit and Credit Information
• Open the Account window.
• Select debit or credit card.
• Patient enters PIN number on the same screen if paying by debit card.
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Statements• Indicate the charges, payments, and balances
of accounts for the preceding month
• Usually sent once per month
• May be on the same day (first, fifteenth, thirtieth)
• May be on a staggered basis according to the alphabet (suggested for large practices to maintain a better cash flow)
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Computerized Statements
• Itemized statement shows dates of payments and treatments for each member of the family during the month.
• Administrative assistant can add special messages or aging columns to statements to enhance the collection process.
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Identity Theft
• Identity theft occurs when the thief uses a person’s personal identifying information to open new accounts or misuse existing accounts.
• The administrative assistant should be ever mindful of the potential of an unknown person in the practice using stolen credit cards or false information.
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Establishing Financial Arrangements• It is wise to create a written financial policy.
• It must:
• Conform to community standards
• Reflect the attitude of the dentist toward the patient's welfare
• Represent sound business concepts
• Be presented in written form to the patient
• Provide options to the patient
• Be adhered to at all times
• (Several problem scenarios are listed in the text.)
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Types of Payment Policies
• Cash only
• Simplifies financial arrangements
• Places limitations on the dental practice
• Payment of statement in full
• Person is expected to make full payment within 10 days of receiving the statement.
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Types of Payment Policies
• Extended payment
• Receiving partial payment over time
• Legally, if payments extend beyond four payments, a "truth in lending form" must be completed and signed even if there is no finance charge.
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Using a Credit Bureau• A credit bureau, or consumer reporting agency (CRA),
reports a person's history of payment when credit was involved.• Reports on accounts placed for collection as well as
bankruptcies, judgments, and lawsuits• After receiving a patient’s credit information, the dentist
decides whether to extend credit. • If a patient is denied credit, the Fair Credit Reporting act
requires the patient be informed of the reason for denial of credit and the name of the bureau from which a credit report was obtained.
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Aging Accounts• Each month, the accounts receivable is
aged.
• With a computer, this can be programmed into the system and is automatically produced when desired.
• The dentist must determine a policy about aging accounts so that these accounts do not become a drain on the practice.
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Collection Procedures
• “An undesirable but crucial responsibility”
• Only a small percentage of patients present a payment problem.
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Fair Debt Collection Practices Act
• Collection procedures are regulated by the Fair Debt Collection Practices Act of 1996.
• Usually these rules apply to collection agencies, but they should also be adhered to in office collection procedures.
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Fair Debt Collection Practices Act• When contacting a patient for collection of a debt,
the debtor
• Cannot be subjected to harassment
• May not be called at work if employer or debtor objects and requests no calls
• May not be called before 9 AM or after 9 PM
• Is the only person who may be contacted about the debt owed
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Collection Letters
• It is recommended to follow a sequence of:
• Reminder
• Notice on a statement
• Inquiry/discussion
• Personal office contact with the patient
• Urgency
• A more urgent call or letter
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Collection Letters• Ultimatum
• A notice of impending collection action • Send only one ultimatum letter with a deadline
date. • Send by certified mail with a return receipt
requested.• If payment is not received by the designated
date, the account must be turned over immediately to an attorney or a collection agency.
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Sample First Collection Letter
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Sample Urgent Collection Letter
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Sample Final Collection Letter
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Telephone as a Collection Instrument• Provides a more personal contact with the
patient
• There are several rules and suggestions regarding use of the telephone in the textbook.
• Remember, privacy is mandated in this form of collection.
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Collection Agency
• Used if the patient did not respond to all previous collection attempts
• Make certain this collection agency is reputable and adheres to federal and state guidelines for collections.
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Collection Agency• A form is completed and sent to the agency
containing:• Debtor’s full name• Last known address and phone number• Total amount of account• Date of last entry on account (credit or debit)• Debtor’s occupation• Business address and phone number• Any other pertinent information
Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.Copyright © 2011, 2006 Mosby, Inc., an affiliate of Elsevier. All rights reserved.
Collection Agency• Once sent to collection, no further office collection activity
should take place.
• Send no more statements.
• Indicate the transfer to the collection agency on the patient’s financial record, giving the date of transfer.
• Refer the patient to the agency if the person contacts the office.
• Report the amount to the agency when payment is received in the office.
• Rely on the agency staff members to do their job.