As a healthcare professional, we know your number-one priority is caring for your patients. Nonetheless, don’t add to the stress of the holidays by letting your accounting and bookkeeping fall by the wayside.
Review this straightforward end-of-the-year accounting checklist and make sure you’re on track for a successful and organized new year.
Fulfill Invoices and Send Reminders
Look through and ensure you have no unfilled invoices waiting to be sent out. If you do, don’t wait any longer. If you have insurance companies or patients who haven’t paid their invoices yet, begin the follow-up process right away.
Record All Expenses
Close out your practice’s financial year by making sure your office has properly recorded and updated all your income and expenses. Falling behind on recording or categorizing your expenses can make starting the new year messier than it needs to be for your practice — and can lead to undesirable surprises down the line.
Properly recording all expenses in your bookkeeping software or accounting software will keep your numbers accurate. It’ll also help your CPA find all your tax-deductible expenses easily when they assist you.
Pay Bills and Paychecks
While making sure your practice is receiving payments, you should also confirm that all your unpaid vendor debts, bills and employee payments are squared away before the new year.
Consider Annual Bonuses
A bonus not only shows your appreciation for your hardworking employees but also boosts morale going into the new year. Additionally, if you pay out your annual bonuses before December 31, the IRS considers them a deductible expense. Consequently, that can lower your taxable income.
As the year comes to a close, consider starting a new tradition of holiday bonuses for your employees.
Purchase Medical and Office Equipment
If you’ve been eyeing some new medical or office equipment for your healthcare practice, now might be the time to buy. Purchasing qualifying equipment and implementing it before the end of the year can allow you to expense the cost up to a certain amount.
Plus, end-of-the-year sales make it easy to find just the right piece for your clinic.
Verify Employee Information
Another way to keep your affairs organized is to go over all current and past employee and contract information to verify everything is fully accurate. Then, you can smoothly send out W-2s and 1099s before tax season.
Review Compliance Documents
The end of the year is also a good time to review HIPAA policies and training and to work on any revisions or updates your practice may want to make to your policies. It’s essential to regularly review all corporate documents and agreements to ensure your healthcare practice maintains ongoing compliance with state and federal healthcare laws.
Practices should also confirm that they’re up to date with their third-party contracts — especially with third parties who might access practice or patient records. Now is also a smart time to schedule updated privacy and compliance training for staff.
Look Over the Employee Policy Manual
Review your practice’s employee policy manual, and then update it as needed. Practices should make sure the policy manual addresses any new or modified requirements for existing and new hires.
[Related: The Importance of Healthcare Accounting]
Meet With a Healthcare CPA
Prepping for the new year can be a difficult and overwhelming process.
That’s why we always recommend meeting with a healthcare-focused CPA. They’ll run projections of your tax liability, get your practice in tip-top shape and prepare it for the upcoming year. An end-of-the-year audit can be extremely beneficial for your healthcare practice, no matter its size.
Your CPA can also look for opportunities to save due to multiple factors:
- Depreciation in owned real estate
- Health savings account or IRA contributions
- Student loan payment deductions
- Investment losses
- Professional dues and subscriptions
And that’s by no means a comprehensive list. Your CPA will know more.
Contact Martin, Bircher, Thompson PC
Contact Martin, Bircher, Thompson PC for more information.
We’ll help get your medical business in prime condition before the new year. Meanwhile, you can focus on providing excellent care for your patients and running a successful, growing practice.
Featured image via PxHere