“Having all the automation technology there definitely facilitates our ability to manage growth and to quickly add locations. The data is all there, so we can easily adjust it to meet the needs of our organization,” he says. Essentially, with a poorly managed AP process, you’re jeopardizing patient security and throwing money that could be spent improving your health system out the door. Continue to work with your front office staff to find the most effective way for your practice to be transparent about your financial policy with your patients. The more your patients know and understand their financial obligation, the easier it will be to collect their bill.

In general, managing your cash flow in the healthcare industry is tricky business. It can be difficult to predict with certainty how much revenue you will generate each month, how much will be written off, or when you will get paid. Your accounts receivable process has a lot to do with smoothing out those fluctuations so that you can more accurately predict the cash balance of the business. Establishing a strong relationship with both patients and insurance companies—and doing your due-diligence to ensure collection of overdue ARs—will help keep cash flow issues at bay. Financial statements are essential for a medical office as they provide insights into the business’s financial health.

Why Buy Software vs. Building or Partnering?

Other than following these general principles, each organization may have slightly different procedures regarding the nature of its operations. Dr.Bill and MDBilling.ca have come together to make it even easier to find the right codes, submit claims and get paid. This article offers general information only and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change.

Not only can your accountant make sure you make all these payments on time, they can also help you set up a system to track these expenses on a monthly, quarterly, and annual basis. Efficient workflows and a trained staff reduce costs, and your highly qualified staff builds trust and respect with your patients. Thorough implementation of some best practices is a starting point to effectiveness and increasing patient accounts receivable.

What Are Some Examples of Payables?

Using industry knowledge and a suite of AI-powered tools, they’ll help you increase collections so you can build a thriving medical practice. Automating claim submissions and claim scrubbing can reduce mistakes, rejections and denials, which means claims spend less time in A/R and insurance companies reimburse your how do accounts payable and receivable affect a medical office practice faster. A real-time eligibility (RTE) tool will ensure you can quickly and accurately check patient insurance before the appointment. You may also consider creating a process for batch checking patient insurance every week, so you can catch and resolve issues before the patient comes into the office.

Write-offs are often a result of a poor collection process, or one that lacks a structured adjustment approval process. It will be beneficial to hire an experienced AR team who can keep up with the constantly evolving operations, collection strategies, and other procedures. They should be proficient in handling a wide range of problems and have the ability to communicate probable solutions to the account holders effectively. This type of unpaid invoice frequently concerns a more significant number of bills; many businesses incur delays in receiving their returns. General Ledger – contains all the accounts for recording transactions related to a company’s assets, liabilities, owners’ equity, revenue, and expenses.

Member organizations of the AMA House of Delegates

Setting up the payroll system you’ll use in your medical practice doesn’t have to be difficult – but it does need to be organized. With so many federal and provincial requirements, including source deductions, overtime hours, tax remittances, and record keeping, it can seem like a daunting task. With the help of your accountant and your staff, you can create a payroll system to best suit the needs of your medical practice. Keeping track of your AR will be crucial in helping you maintain your monthly, quarterly, and annual financial statements. These are what will be provided to your lenders as backup for any loans you may have used to finance your operations, so it’s extra important to ensure they are correct. This will also be helpful at tax time, since you will have a clear idea of how much you’ve earned – without scrambling for receipts.

• This process not only ensures that your invoices get paid on time, but keeps a record of any recurring payment amounts, double payments, or overdue balances.
• This sets both patient interactions and billing transactions up for success moving forward, but can be cumbersome and time-consuming if you’re still using manual processes and systems to do so.
• Have the patients sign a payment obligation document to set expectations for their charges.
• Insurance companies frequently and purposely make it difficult to receive payment by denying insurance claims for myriad reasons.
• While information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed.
• Payments should also be recorded by your accounting department into your ERP for consistency.

Medical providers reduce their outstanding charges when patients must pay copays and invoices in the office. For some treatments, offices even demand direct deposits or percentage payments rather than waiting until after the procedure or treatment to ask for full payment. Evaluating your accounts receivable process remains one of the easiest ways for many medical providers to improve their accounts receivable.