Are you sure that whatever collections coming in the door are getting to the bank? Are your miscellaneous charges making it to the bookkeeper to bill? Most doctors think that they have this under control until it is too late. Maybe this pearl can help put your mind at ease.
Most practices think that just because they have a computer that their income and charges are under control. And for the most part they are, except when misused. One form of misuse is allowing anybody to enter payments and charges into the computer; not good, only the bookkeeper should. Of course another form of misuse is embezzlement, which is not that rare.
Then there are the forgetful misuses such as not keeping up with insurance payments and charges and forgetting to account for “direct deposits”. Another is not to have a policy on post-dated checks; and many more.
The best way to make sure is to have competent staff using other-than computer controls for your financials. Most practices think that this is a waste of time until they are embezzled or just have income disappear. I can tell you of many stories of financial misuse my clients have had to deal with, but why bother.
The best way to test whether your people are doing what they should with your computer is to match a manual system to your computer system. The manual financial control system is presented in the attached PDF. Just go through each control step and equate it to your daily computer control. If all of the steps are accounted for, fine. If not, install a control to have it accounted for.
For example, is a different person handling the income than the one posting it or putting the cash/checks in the bank? Is the $ amount of cash/checks received equal to the amount posted and equal to the amount deposited? There should be a daily control making sure that this is accounted for.
If you find that your charges and initial payments are up, yet your collections aren’t and this has been going on for months you need to check on: insurance payments, direct deposit payments, declined credit card payments, and also review the management pearl “The Embezzlement Virus”.
