Accounting is a critical aspect of any business. Accounting focuses on organizing the paperwork, budget, tax forms and other financial elements of a business for it to continue on the path to success. Because different industries have different needs, if you are a healthcare professional, finding an organization that specializes in your field can be extremely beneficial.
Healthcare accounting is a branch of accounting that deals specifically with the healthcare industry. Healthcare accountants collect, prepare and report financial information for healthcare organizations to remain compliant and make strategic financial decisions for the future.
In this article, we will go over the importance of healthcare in accounting, including who qualifies, particular aspects of financial management, problems healthcare accounting can eliminate and some of the benefits of healthcare accounting.
Table of Contents
Who Qualifies for Healthcare Accounting Services?
Those in the following professions can hire professional healthcare accounting services to get the best financial and tax assistance:
- Nursing homes
- Dental offices
- Orthodontic offices
- Doctor’s offices
- Specialist clinics
- Outpatient clinics
- Counseling and therapy clinics
- Urgent care centers
- Imaging and diagnostic centers
WHAT ARE THE TOP Aspects of Accounting and Financial Management?
For a healthcare business to succeed, it should focus on certain aspects of accounting and financial management. A qualified healthcare certified public accountant (CPA) can take care of all these elements and duties (and more) to help everything run smoothly.
A big part of running a successful organization is planning for the future. Healthcare accountants can assist medical professionals in setting up goals and guidelines to achieve financial success.
Once you put guidelines and goals into place, healthcare accountants can monitor and control the functional steps that get your healthcare business where it needs to be.
Organization and Monitoring
Organization is an essential element of healthcare practices and medical facilities. Healthcare accountants can help with this by focusing on directing and standardizing the facility’s day-to-day financial duties. Regular monitoring can catch and redirect anything that does go wrong.
Sound and smart financial decision-making from a trained healthcare accountant can make all the difference for a medical organization’s success.
Healthcare accountants are in charge of financial reports that indicate fiscal performance. These reports include balance sheets, profit & loss reports, cash flows and physician compensation calculations.
Depreciation of Assets
Providers may use medical equipment, IT infrastructure and buildings that depreciate over time. Depreciation accounting calculates the cost of the product, the length of time it will be useful and the depreciation rate to figure out what it is costing your facility and when you should upgrade or replace it.
Credit Balances and Outstanding Checks
Healthcare institutions can collect an accumulation of credits in accounts receivable for when an amount collected is greater than the amount a patient owes. Accountants in healthcare deal with these credit balances as well as any outstanding checks that need to be turned over to the government.
Problems Healthcare Accounting Can Eliminate
Hiring a CPA experienced in the healthcare industry can eliminate a variety of financial issues that could stunt your practice’s growth. Here are a few examples.
Amateur Account Handling
If a healthcare company is dependent on an accountant with little or no experience in the healthcare industry, trouble may follow. Mismanaged funds or tax forms handled by someone without proper training can prevent you from providing the best services to your patients.
A great healthcare CPA can keep everyone in the know when it comes to financial standings and future goals, especially with the help of quality financial reports. This role in turn can help increase communication and eliminate easily avoidable mistakes.
Specific procedures and workflow systems that healthcare accountants put into place can help boost productivity and decrease costly downtime and delays.
WHAT ARE THE Benefits of Healthcare Accounting?
The benefits of working with a healthcare accountant for your practice are immense. Inefficient accounting or non-industry focused accounting can result in damaging mishaps that can affect profitability and even the quality of care you provide your patients. Here are a few benefits of healthcare accounting.
Creating and Meeting Financial Goals
Healthcare accountants can review your business’s budget and expenses and create a path to success. Qualified CPAs not only can help you create financial goals for your practice but also can designate practical steps to get you there quickly and effectively.
Providing Accurate Records
Providing accurate records is crucial for maintaining your healthcare business’s financial health. Healthcare accounting can help you stay on top of daily operations with consistent bookkeeping and accounting. This record-keeping allows your department to easily prepare and look over financial statements, compute tax obligations and manage cash flows confidently.
Managing Treatment Costs
For health facilities to remain as profitable and as affordable to patients as possible, they need to strike a precarious financial balance. One way of doing this is to cut costs. With the assistance of a healthcare accountant, your practice can track expenses that do not contribute to better care and then eliminate them from your budget. Efforts like automation can also help cut costs and boost profitability when it comes to bill-paying and sending invoices.
Evaluate Business Performance
It’s easy to evaluate your business performance when you have up-to-date and accurate financial records. Healthcare CPAs can provide a clear and understandable view of your financial state, and they can work with you to make wise financial decisions. This will all enhance your credibility and reputation in the eyes of creditors, financiers and potential patients.
Federal and State Tax Compliance
If your healthcare business has a CPA who specializes in healthcare, you are one step closer to statutory compliance with the IRS. Healthcare accounting helps you to complete and submit deductions, computations, required paperwork and tax forms on time.
Contact Martin, Bircher, Thompson PC Today
At Martin, Bircher, Thompson PC, we are committed to providing excellent services addressing all aspects of healthcare accounting. From services for physicians to services for dentists, we have decades of experience understanding the key factors of business and financial performance and developing successful solutions.
If you want more information about bookkeeping tips for healthcare practices and more, be sure to read our other blog posts.
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