Lecture Medical assisting: Administrative and clinical competencies (2/e) - Chapter 18

Chapter 18 - Accounting for the medical office. Accounting is another of the administrative competences in the medical assisting career. A person in this career may be required to take on many duties in the medical office that would typically be done by an office manager. This chapter describes the key areas of accounting and bookkeeping that may be encountered.

PowerPoint® to accompany Medical Assisting Chapter 18 Second Edition Ramutkowski  Booth  Pugh  Thompson  Whicker Copyright © The McGraw-Hill Companies, Inc Permission required for reproduction or display Accounting for the Medical Office  Objectives 18­1 Describe traditional bookkeeping system, including single  entry and double entry 18­2 Define a pegboard system 18­3 Explain the benefits of performing bookkeeping tasks on the  computer 18­4 List banking tasks in a medical office 18­5 Describe the logistics of accepting, endorsing, and  depositing checks from patients and insurance companies 18­6 Reconcile the office’s bank statements 18­7 Give several examples of disbursements Accounting for the Medical Office  Objectives 18­8   Record disbursements in a disbursement journal.   18­9   Set up and maintain a petty cash fund 18­10 Create employee payroll information sheets 18­11 Compute an employee’s gross earnings, total deductions, and net earnings.  18­12 Prepare an employee earnings record and payroll  register 18­13  Set up the practice’s tax liability accounts 18­14  Complete federal, state, and local tax forms.   18­15  Submit employment taxes to government agencies 18­16  Describe the basic parts of an employment contract Introduction    Bookkeeping  Systematic record of  business  transactions You need an  understanding of basic  accounting system and  certain financial  management skills.  A medical practice is a business, its  income must exceed its expenses! Establishing Procedures       Maintain the practice’s  bookkeeping Be consistent Use check marks as  you work to avoid  errors Write clearly with same  type of pen Double check your  work frequently Bookkeeping Systems  Single entry system      Daily log Patient ledger cards Checkbook registers Payroll records Petty cash  Double­entry    Assets – goods or  services Liabilities – amounts  owed by the practice Both sides of the  accounting equation  must balance Assets = liabilities + owner equity Pegboard System     Each transaction on four different forms Reduces errors and saves time Called “one­write” system Uses lightweight board with pegs     Daily log sheets Patient ledger card Charge slips Deposit slips Pegboard Processes At start of day   Upon patient arrival  Attaching the charge slip Before the patient leaves Payments after the patient  visit End of day Bookkeeping On the Computer  Benefits •   Saves time •   Performs mathematic  calculation •   Software for taxes,       calculating liabilities   Banking for the Medical Office   Banking tasks      Writing checks Accepting checks Endorsing checks Making deposits Reconciling bank  statements Keep all bank materials secure because they  represent the finances of the practice 10 Types of Checks Voucher checks  Standard checkbook Cashier’s check  Purchased from a bank and signed by the bank official Counter check  Allows depositor to withdraw funds from her account  only Traveler’s  checks  Used when traveling instead of carrying large amounts  of cash 27  Recording Disbursement     Give each column a  heading Record each check in  appropriate columns Determine expense  category of the check Record the check  amount 28 Managing Petty Cash       To avoid writing checks for such small amounts use  petty cash funds Usually $50.00 Write a check to “petty cash” Enter the check in the miscellaneous column of  disbursement records Get a petty cash voucher when money is removed Replace money once a month to keep amount at  $50.00 29 Understanding Financial Summaries  Statement of Income  and expense   Cash flow statement   Profit and loss  statement Money available to  cover expenses Trail Balance  Combined expense  column total equal to  total check amount  column 30 Handling Payroll     Obtaining tax ID  number Creating employee  payroll information  sheets Calculating employees’  earnings Subtracting taxes and  other deductions     Writing paychecks Creating employee  earnings records Preparing a payroll  register Submitting payroll  taxes 31 Handling Payroll Electronically    Create, update, and  delete employee  payroll information  files Prepare employee  paychecks, stubs and  W­2 forms Update and print  employee earnings  records  Update all appropriate  bookkeeping records,  such as payroll ledger  and general ledger with  payroll data 32 Taxes      Calculating and filing  taxes Setting up tax liability  accounts Understanding federal  tax deposit schedules Submitting federal  income and FICA taxes Submitting FUTA  taxes Click for Larger View 33 Quarterly Tax Form When should  this form be  completed? Every three  months BACK 34 More Taxes    Filing an employer’s  quarterly federal tax  return Handling state and  local income taxes Filing wage and tax  statements     W­2 W­3 Transmittal of wages  Tax statements 35 Managing Contracts  A written agreement of  employment terms  between employer and  employee     Include names and  addresses Considerations  Starting and ending  dates Signatures of both  parties 36 Medical Assistant Contract  Includes:       Description of your duties and your employer’s  duties Plans for handling major changes in job duties Salary, bonuses, and other compensation Benefits Grievance procedures Termination procedures 37 Apply Your Knowledge  What is a W­2?  What is FUTA?   38 Apply Your Knowledge ­Answer  What is a W­2?  Shows the employee’s total taxable income  for the year   What is FUTA?  Annual Federal Unemployment Tax Return 39 Summary  Medical Assistant   You will need to understand the proper  management of accounts receivable and accounts  payable   The use of standard bookkeeping and banking  procedures is necessary to maintain the business of  the office 40 End of Chapter 41 ... 18 3 Explain the benefits of performing bookkeeping tasks on the  computer 18 4 List banking tasks in a medical office 18 5 Describe the logistics of accepting, endorsing, and depositing checks from patients and insurance companies 18 6 Reconcile the office’s bank statements...Accounting for the Medical Office  Objectives 18 1 Describe traditional bookkeeping system, including single  entry and double entry 18 2 Define a pegboard system 18 3 Explain the benefits of performing bookkeeping tasks on the ... 18 6 Reconcile the office’s bank statements 18 7 Give several examples of disbursements Accounting for the Medical Office  Objectives 18 8   Record disbursements in a disbursement journal.   18 9   Set up and maintain a petty cash fund