Intro
Let’s face it, if accounting is not your profession but you’re managing your practice’s finances on your own, you’re going to encounter problems. Some problems are an easy fix, while others are complicated and enormously stressful.
We’re going to look at some common accounting problems you’re likely to face if you have a DIY approach to financial management.
Is Tracking Deferred Revenue and Expenses Costing You Accuracy and Time?
Manual accounting processes are so passe. Technology is so advanced you don’t even have to do all of the processes because automation has taken over. Why then would you continue to manually track deferred revenue?
Comprehensive accounting software, like Sage Intacct, provides clear processes to ensure you never accidentally miss an entry. Instead, deferred expenses are accurately recorded, sparing you the agony of trying to track expenses during an audit.
Software can track expenses in real time and enables you to implement standardized processes to recognize revenue as services and to ensure deferred revenue hits the right reporting periods.
Are Slow Payments Hurting Your Cash Flow and Putting You at Risk?
Times are tough, but late payments make them considerably tougher for you. They make a mess of your cash flow, cause delays, and scupper long-term financial planning.
Manual billing systems and long payment cycles leave your practice financially vulnerable, putting your business at risk and making staff worry about their salaries being paid in full and on time.
Your staff work hard, they don’t need that kind of stress, and neither do you. You can avoid all this by integrating billing and accounting systems that speed up collections and automate reminders for overdue payments.
Give patients different payment options, including online payments. The easier it is, the quicker they’ll pay.
Is Payroll Tax Management Becoming a Compliance Nightmare?
Tax is a never ending torment. It worms its way into everything. Rather than tackling it manually, invest in accounting software with tax management functions. You’ll avoid non-compliance issues that result in fines and penalties and you’ll ensure that your practice stays up-to-date with tax regulations – which have been known to change, especially if you operate in different states.
Software automates tax calculations, which you can rely on for accuracy. This is important if you don’t want any unpleasant surprises from the IRS for outstanding amounts. Do yourself a favor and invest in software that integrates payroll and accounting systems to simplify tracking and ensure accuracy in payroll tax management.
Are Mismatches in Patient Accounts Costing You Money and Frustrating Your Patients?
Do you know what really annoys patients? Incorrect billing. Do you know what really messes up your books? Incorrect billing.
Accounting software that reconciles patient accounts keeps them happy and your books in good order. Not only does software prevent delays in reconciling payments and records, but it also prevents revenue leakage – you definitely want to plug that.
Automation ensures accuracy in your patient accounts and when you integrate billing with accounting systems you also benefit from real-time updates in your financial records.
It’s a good idea to schedule regular audits to minimize discrepancies and keep your patients happy and your financial records accurate.
Is Your Practice Losing Money Because You’re Not Tracking Billable Hours Correctly?
If there’s one sure way to make mincemeat of your revenue it’s to lose track of billable hours. Unfortunately, this is a real risk if you insist on manually recording and tracking billable hours. Accounting software that records billable hours in real-time is a godsend.
Look for software that differentiates tasks and expenses and uses time-tracking functions to integrate with your existing accounting system to ensure accuracy when capturing billable data.
You also want software automation to categorize tasks and expenses clearly. This prevents revenue loss and improves accuracy in billing. No more mincemeat, only strawberries and cream from here on out.
Is Your Cash Flow Suffering Due to Payment Delays and Lack of Forecasting?
Poor cash flow results from unpaid bills and delayed insurance payments. The situation is not helped by manual cash flow tracking, which is prone to errors. Manual tracking does even more damage by being time-consuming and inefficient.
Problems are compounded if you don’t have clear payment cycles, which enable you to accurately forecast cash flow from month-to-month (or week-to-week).
Software with automated billing and scheduled payment reminders save the day. Software with cash flow forecasting tools is even better because you can predict payments and be more accurate in your financial planning.
Choose software that tracks payment cycles for extra clarity and accuracy in your cash flow projections.
Is Payroll and Expense Management Consuming Too Much Time and Energy?
As we’ve seen, manually processing payroll and tracking expenses is a bad idea. Chances are there’ll be costly mistakes and unnecessary financial risks. For example, errors in payroll tax filing for which the taxman will take his pound of flesh.
You also spend more time wrapped up in employee compensation and expense reports than growing your practice.
Thank goodness for automated payroll processing and tax filing. Not to mention integrated systems that track employee hours, expenses, and compensation in a single, central location.
Even with sophisticated accounting software, you still want to regularly review financial reports to ensure everything is ticking over nicely and your expenses are under control.
Closing
What have we learned?
That manual systems will cost you a fortune in errors, non-compliance penalties, and time wasted. And that accounting software with AI and automation functionality is the best way to manage your accounts.
Be smart. Use software for daily accounting needs and outsource financial management services to a company that specializes in healthcare-specific accounting practices.
