Common Accounting Mistakes In The Healthcare Industry
When establishing your healthcare services operation, you have probably found yourself taking on far more responsibilities than you could have dreamed of. Not only are you the primary physician or dentist, you’re also the building manager, accountant, marketing manager and even photographer. However, once you’re off the ground, it is important to put the right pieces in place so that you can focus on your craft while the rest of the business runs smoothly in the background.
Perhaps the most overlooked, yet most important, role to fill first is the accounting and financial management position. Why? Because when you grow too quickly without dedicated accounting resources, you open your operation up to a number of liabilities. We’re going to highlight just some of the major problems that can arise when accounting takes a backseat.
1) Lack of In-Depth, Routine Reporting
When it comes to running and growing a business, analytics are everything. Are the cash flow forecasts looking optimal for growth? Has the total capital value increased since opening doors? Are the balancing sheets up-to-date? These reports – among an abundance of other accounting documentation – provide deep insight into the performance of your operation. Without routine reporting, you walk blindly toward the unknown. With it, you make calculated decisions toward a more prosperous future.
2) Cyber-Security & Financial Data Management Flaws
With the recent influx of data breaches within the past year, cybersecurity is on the minds of patients, accountants, business owners and the federal government. Mega-brands such as Blue Cross Blue Shield, Anthem, Chipotle and even the IRS have all fallen prey, exposing hundreds of thousands of customers and clients to hackers. A severe breach could spell “catastrophe” for any medical practice or hospital. Nefarious outsiders will poke around your entire operation until they find a weak link – this could be anything from a website portal login, to payment processors, to 3rd party applications you use to make everyday workflow easier.
Perhaps the best way to prevent security mishaps is through the implementation of a SOC Audit. A team of professional accounts explore each process of your business and identify areas of high risk along with suggestions to help fix the issue before dire problems arise. Of course, this is just the “skinny” synopsis of the SOC audit service – additional information can be found here.
3) Lapses In Billing & Coding Knowledge
Medical billing and coding errors are one of the most problematic, common and costly conflicts for any new operation. New billing codes are introduced and regulations are added each year. Sometimes the changes won’t affect you; other times the amendments can throw you through a migraine-inducing loop. By hiring professional accounting help, you can stay abreast of all relevant billing and coding changes to keep your finances in order and your business compliant. Instead of worrying about the differences between a rejected claim and a denied claim, you can shift your focus to managing personnel, gaining more clients and honing your own skills.
4) No Accountability In the Billing Department
Credit balances can be difficult to manage and old checks pile up quickly when you don’t have dedicated resources in place. It’s no secret – as a healthcare business, you are going to write a lot of checks. And even if you seemingly do everything right, problems can slip through the cracks. Situations can arise that you never would have thought of, such as handling credit balances for patients who may have passed away or clients who have moved without paying their final bill. Depending on the stage of your business, you likely do not have time to track down each individual patient and hold them accountable. You may also lack the know-how to craft comprehensive polices that ensure you’re protected under “unclaimed property law.” Long story short – you need cash flow. You need patients paying on-time. You needed someone dedicated to communicating with patients to remedy delinquent accounts before fines, penalties and bad blood are introduced to the equation.
5) Neglecting Business Management In Favor Of Accounting
An entrepreneur takes pride in every stride they’ve made after building a business from the ground-level. Every facet of that operation is a part of them. However, as the business begins to grow, so does the list of responsibilities and risks. At some point, you reach a resources threshold and it is best for all parties to pass off the accounting tasks to a professional – whether they be in-house employees or an experienced outsourced accountant. Assuming you are still the primary “talent” of your operation, your time is best spent on the ground. Get back to leading your team and managing the business and leave the figures and billing codes to number-crunchers.