Y khoa, dược - Accounting for the medical office

18Accounting for the Medical Office18-2Learning Outcomes18.1 Describe traditional bookkeeping systems. 18.2 Explain the benefits of performing bookkeeping tasks on the computer.18.3 List banking tasks in a medical office.18.4 Describe the logistics of accepting, endorsing, and depositing checks from patients and insurance companies.18-3Learning Outcomes (cont.)18.5 Reconcile the office’s bank statements.18.6 Give several examples of disbursements.18.7 Record disbursements in a disbursement journal.18.8 Set up and maintain a petty cash fund. 18.9 Create employee payroll information sheets. 18-4Learning Outcomes (cont.)18.10 Compute an employee’s gross earnings, total deductions, and net earnings.18.11 Prepare an employee earnings record and payroll register.18.12 Set up the practice’s tax liability accounts.18.13 Complete federal, state, and local tax forms.18.14 Submit employment taxes to government agencies.18-5IntroductionAccountingAdministrative competencyResponsibilities of medical assistantBookkeepingBankingBookkeepingSystematic record of businesstransactions18-6Business Side of a Medical Practice AccuracyStrive for 100%Records form a chain of information Errors can result in loss of income byBilling a patient twice for same serviceOmitting bank depositsMaking improper payments to suppliersA medical practice is a business: income must exceed expenses!18-7Establishing Procedures Maintain procedures in a logical and consistent mannerBe consistent in the way you handle transactionsUse check marks as you work to avoid errorsWrite clearly with same type and color of penDouble-check your work frequentlyKeep columns of figures straight18-8Apply Your KnowledgeANSWER: Errors can result in loss of income by billing a patient twice for same service, omitting bank deposits, and making improper payments to suppliers.What can be the result of in errors in billing?Good Answer!18-9Patient Accounting MethodsComputerized – most commonManualSingle-entryPegboardAll methods recordIncomeCharges DisbursementsOther financial information$$$$18-10Patient Accounting Methods (cont.)Bookkeeping on the computerPerforms same tasks as manual method Saves timePerforms math calculationsHas built-in tax tables18-11Single-Entry SystemOne entry per transactionDisadvantages Not self-balancingDoes not detect errors as readily Fewer accuracy checkpoints18-12Single-Entry System (cont.)Daily logChronological list of charges and payments receivedJournalizing – Patient nameService providedFee chargedPayment received18-13Single-Entry System (cont.)Patient ledger cardPatient name, address, insurance informationDocument financial transactions of patient accountInformation from daily log Ensure accuracyTotal charges and receipts from ledger must equal total charges and receipts in daily log18-14Single-Entry System (cont.)Accounts receivableShows total owed to the practiceTotal of items on accounts receivable should equal outstanding balances on patient ledger cardsAccounts payableAmount practice owes vendorsCompare with invoicesKeep accurate records of accounts paid18-15Single-Entry System (cont.)Record of office disbursementsList of payments made Information on recordPayee – person receiving paymentDateCheck numberAmount paidType of expense$$$18-16Single-Entry System (cont.)Summary of charges, receipts, and disbursementsComparison of income and expensesUsed to determineProfitabilityAmount charged for servicesPayments received for servicesCost of running the officeBreakdown of expenses into categories$$$18-17Pegboard SystemEach transaction is entered on four different forms at the same timeCalled “write-it-once” systemSeldom used since computerization of recordsUses lightweight board with pegsDaily log sheetsPatient ledger cardCharge slipsDeposit slipsUnderstanding the principles of this system will help you understand the concepts behind the computerized accounting system18-18Pegboard System (cont.)New log sheet and charge slips/receipts on pegboard each dayWhen a patient arrives for an appointment, put the patient ledger card on the pegboard and enter date, patient name, and previous balance on charge slip sectionRemove charge slip/receipt and attach it to patient chart18-19Bookkeeping Methods: Pegboard SystemBefore the patient leaves, place ledger card between charge slip and daily log and enter appropriate information on charge slipRecord payments made after appointment on ledger and daily log Update patient’s account in the event of a returned checkEnd of day – total and check math in all columns18-20Apply Your KnowledgeWhat types of bookkeeping methods might you use in a medical office?ANSWER: You might use these bookkeeping methods in a medical office:Single-entry Pegboard Electronic Right!18-2118-21Banking for the Medical Office Banking tasksWriting checksAccepting checksEndorsing checksMaking depositsReconciling bank statementsKeep all bank materials secure because they represent the finances of the practice18-2218-22Banking TasksCheck – bank draft or order for paymentPayer – person who writes the check Negotiable –Legally transferable from one person to another To be negotiable a check must:Be written, signed, and datedInclude the amount to be paidBe made payable to payeeBe made payable on demand or on a specified dateInclude the name of the bank that is directed to make payment18-23Banking Tasks (cont.)Other negotiable papers Cashier’s check – check issued on bank paper and signed by bank representativeCertified check – payer’s check written and signed by a payer and stamped “certified” by the bankMoney order – certificate of guaranteed payment18-24Banking Tasks (cont.)Check codesAmerican Banking Association (ABA) numberAppears as a fraction (60-117/310)Geographic area and specific bankMagnetic ink character (MICR) code Numbers and characters at the bottom of check Enables checks to be read, sorted, and recorded18-25Banking Tasks (cont.)Types of checking accountsPersonal accounts – private financial mattersBusiness accounts – office expensesInterest-earning account – used to pay special expenses such as taxes and insurance premiums18-26Banking Tasks (cont.)Accepting checks Check for:Correct dateCorrect amountSignature Do not accept a third-party checkDo not accept a check marked “Payment in Full” unless it actually pays the complete outstanding balancePower of attorney –gives legal right to handle financial matters for someone else18-27Banking Tasks (cont.)Endorsing checksWrite the name of the doctor or practice on the backInclude “For Deposit Only”Add bank account numberUse ink or rubber stamp18-28Banking Tasks (cont.)Deposit slipPost the payment to the patient ledger cardPut the check with others to be depositedFill out a deposit slip – may attach a computer printout with list of checks18-29Banking Tasks (cont.)Making the depositMake deposits in personAvoid sending cash through the mailObtain deposit receiptMay have to make deposits daily18-30Banking Tasks (cont.)Reconciling bank statementsReconciliation – Compare the office’s financial records with the bank records to ensure that they are consistentMust be done once a monthBe sure all checks written are the same, and all checks deposited match on both records.18-31Electronic BankingAdvantagesImproves productivityImproves cash flowImproves accuracyBasic tasks are the same as traditional banking methodsYou are still responsible for recording and depositing checksComputer password for security of banking recordsComputer software will:Record depositsPay billsDisplay checkbookBalance checkbook18-32Apply Your Knowledge What are three things that you should include when you endorse a check that you receive from a patient? ANSWER: When endorsing a check you should put the name of the doctor or practice, “For Deposit Only,” and the bank account number on the back of the check.Excellent!18-33Managing Accounts PayableThree types: Payments for supplies, equipment, and practice-related products and servicesPayroll (largest portion)TaxesFederalStateLocal 18-34Managing DisbursementsDisbursement – any payment for goods or servicesPrinciples for managing suppliesOrder when necessary and in proper amountsCombine orders if possibleFollow practice purchasing guidelinesBuy from reputable suppliersPurchase the best quality supplies for the amount that insurance companies will reimburse18-35Writing ChecksChecking account balance must cover the check you will writeHave the doctor sign the checkMark invoice with date, check number, and amount paidCopy for office recordsIf you make an error when writing a check, write VOID in ink across the front of the check18-36Writing Checks (cont.)Commonly used checksStandard checksVoucher checks – business checks with stubs attachedLimited check – void after a specified period of time, i.e., 90 daysCashier’s check – purchased from a bank and signed by the bank official 18-37Writing Checks (cont.)Other types of checksCounter check – allows depositor to withdraw funds from own account onlyTraveler’s checks – purchased to use when traveling instead of carrying large amounts of cash18-38Recording DisbursementsGive each column a headingRecord each check in appropriate columnsDetermine expense category of the checkRecord the check amountTracking expensesWatching for changesHelps control expenses18-39Managing Petty CashPetty cash fund – cash kept on hand in the office for small purchasesUsually $50.00Write a check to “petty cash”Enter the check in the miscellaneous column of disbursement recordsCreate a petty cash voucher when money is removedKeep receipts and record withdrawals on record formReplace money once a month to keep amount at $50.0018-40Understanding Financial SummariesStatement of income and expenseCash flow statement – money available to cover expensesTrial balance – combined expense column total equal to total check amount column18-41Apply Your KnowledgeAccounts payable includes what types of disbursements?ANSWER: Accounts payable includes disbursement for:Offices supplies, equipment, and practice-related products and services PayrollTaxes Very Good!18-42Handling PayrollObtaining tax ID numbersCreating employee payroll information sheetsCalculating employees’ earningsSubtracting taxes and other deductionsWriting checksCreating employee earnings recordsPreparing a payroll registerSubmitting payroll taxes18-43Handling Payroll (cont.)Obtaining tax ID number from the IRSEmployer identification number (EIN)Form SS-4 Application for EINMay also need state identification numberCreating employee payroll information sheetsUp-to-date information for each employeeIdentification informationEmployment Eligibility Verification (Form I-9)Employee’s pay schedule, number of dependents, payroll type and deductions18-44Payroll Information SheetsPay scheduleHow often employee is paidNumber of dependentsPeople who depend on the employee for financial supportLocate this on the employee’s Withholding Allowance Certificate (Form W4)Update W4 annuallyPayroll type HourlySalaryCommissionVoluntary deductions Additional federal withholding taxesContributions to a retirement planPayments to a health insurance plan18-45Gross Earnings Gross earnings – the total amount of income earned before deductionsCalculating gross earningsHourly employee:hourly wage × hours workedSalaried employee:salary amount for the pay periodFair Labor Standards Act Limits number of hours employee may workSets minimum wageRegulates overtime pay18-46Making Deductions Tax liability accounts – used to pay taxesIncome taxes – federal, state, and local tax tablesFICA taxesHalf from employer and half from employeeSocial Security and Medicare reported separately18-47Handling Payroll (cont.)Unemployment taxesFederal Unemployment Tax Act (FUTA) Not a deduction from employee but based on salaries and paid by employerState Unemployment Tax Act (SUTA) –calculated differently than federalWorkers’ compensation – insurance against loss of income from work-related injury, disability, or disease18-48Handling Payroll (cont.)Calculating net earningsGross earnings – total deductionsPreparing paychecksAmount for net earningsMethodsManual Electronic bankingPayroll serviceCheck stub to track earnings and deductions18-49Handling Payroll (cont.)Employee earning recordsEach pay periodGross earningsIndividual deductionsNet earningsPayroll registerSummarizes vital information about all employees and their earningsUpdate at the end of each pay period18-50Handling Payroll ElectronicallyAccounting or payroll softwareCreate, update, and delete employee filesPrepare employee paychecks, stubs, and W-2 formsUpdate and print earning recordsUpdate bookkeeping recordsPayroll ledgerGeneral ledger18-51Apply Your KnowledgeDistinguish between FICA , SUTA, and FUTA. ANSWER: FICA are taxes withheld for Social Security and Medicare. SUTA covers the state unemployment taxes, and FUTA is the Federal Unemployment Tax Act. 18-52Calculating and Filing TaxesSetting up tax liability accountsUsed to hold money withheld from paychecks until it is sent to appropriate government agenciesBank must be authorized by the IRS to accept federal tax depositsUnderstanding federal tax deposit schedulesIRS determines deposit scheduleQuarterly, monthly, or biweekly18-53Calculating and Filing Taxes (cont.)Submitting federal income and FICA taxesElectronic funds transfer (EFT)Federal Tax Deposit (FTD) coupon (Form 8109) if EFT not used18-54Calculating and Filing Taxes (cont.)Quarterly return Provides a more complete accounting to IRSEmployer’s Quarterly Federal Tax Return (Form 941)Submitting FUTA and SUTA18-55Calculating and Filing Taxes (cont.)Handling state and local income taxesUse appropriate Forms ProceduresSchedulesFiling wage and tax statementsW-2Taxable income for previous yearW-3Summarizes all employees’ earnings and federal income and FICA taxes withheld18-56Apply Your KnowledgeWhat are the W-2 and the Form 941?ANSWER: The W-2 is the IRS form showing the employee’s total taxable income for the year. The Form 941 is the Employer’s Quarterly Federal Tax Return. Gold Star Answer!18-57In Summary18.1 Traditional bookkeeping systems in the medical office are also known as patient accounting methods. Some medical offices still use manual systems; however, most medical practices use computerized systems. These systems record income, charges, disbursements and other financial information.18.2 Computerized bookkeeping saves time and reduces repetitive tasks.18.3 Banking tasks include writing checks, accepting checks, endorsing checks, making deposits, and reconciling bank statements.18-58In Summary (cont.)18.4 Accepting and endorsing checks from patients and insurance companies requires excellent financial skills. Make sure you follow the policies and procedures of your office while completing these tasks.18.5 In reconciling a bank statement, make sure that the bank record of deposits, other payments, and withdrawals agrees with the medical facility’s record of deposits, payments, and withdrawals.18.6 Employee payroll, rent, and utilities payments are examples of medical office disbursements.18-59In Summary (cont.)18.7 You may record disbursements in a check register, journal, or the bottom section of a daily log. Make sure you follow the proper record disbursement steps.18.8 Managing petty cash is needed for dispensing minor expenses. When funds are depleted, make sure you replenish the account and write a check to “Cash.”18.9 In creating an employment payroll information sheet, you must find out the employee’s pay schedule, number of dependents, payroll type (hourly or salaried), and any voluntary deductions.18-60In Summary (cont.)18.10 When computing an employee’s earnings, make sure you know the correct amount of hours worked, the hourly amount, and any deductions so that the net amount will be calculated correctly.18.11 Medical offices need to keep an employee earnings record for each employee. When creating the record, obtain the necessary information such as name, social security number, and number of dependents. At the end of each pay period, record earnings to date and other pertinent information.18-61In Summary (cont.)18.12 In setting up the practice’s liability account, it is important to hold the money deducted from employee’s paychecks until they can be appropriately disbursed to the government agencies. Record the deposited amounts as debits in the practice’s checking account.18.13 When completing a practice’s tax forms, make sure that you submit the appropriate state and federal taxes, file an Employer’s Quarterly Federal Tax Return, and if necessary, prepare state and local quarterly tax returns as well. Additionally, you will have to file Wage and Tax Statements for the practice.18.14 Federal, state and local tax returns should be filed quarterly for the medical office practice.18-62End of Chapter 18Indoors or out, no one relaxes in March, that month of wind and taxes, the wind will presently disappear, the taxes last us all the year.  ~ Ogden Nash