The definition of ‘Checks and Balances’ is various procedures that are set in place to reduce mistakes or improper behavior. Now, take a second to think about that. We use this method for almost every operational procedure that we put in place at our hospital. From reminder cards to filling prescriptions, there is a double check in place to help us reduce errors made by our team. Checks and balances are also established to ensure that no one person has absolute control over decisions at the hospital and forces us to work as a team to complete tasks. This sounds like a good system to me.
As a practice owner you have a lot of tasks on your plate. If you have the right people in the right places and plenty of checks and balances in place you can rest easy knowing that your business is being run successfully.
One place that I have found that practice owners have little to no checks and balances in is their practice finances. Here are a few tips to keep your bookkeeping records in check.
Previous Month … Maintain a copy of your Quickbooks information on file outside of the hospital. Ask your bookkeeper for a copy of your Quickbooks information each month. Print your balance sheet and profit and loss statement from the previous months and compare the information with the most recent copy. Did any information change? If so, review the changes with your bookkeeper to ensure that items were not altered from the previous month.
Physical Checks … Keep physical checks limited in your practice. Maintain the majority of your records online and check your online banking information routinely to ensure that you are familiar with the vendors that are being paid.
Voided / Deleted Items … Quickbooks does a great job of tracking any item that has been deleted from the history. Run a report by going into the reports section à accountant and taxes à Voided / Deleted transaction report. This will give you information on whether your finances have been tampered with.
Dates … Make sure your bookkeeper is a good at entering the correct dates into Quickbooks. You may have a false sense of your net profit for the month if your bookkeeper has entered bills under the wrong date. Quickbooks will automatically select the date that the transaction is being entered and not the date on the invoice, which can create a false sense of your finances if you are not careful.
Monthly Bills … Along with correct dates one thing to check is a monthly reoccurring bill. Utility bills come through your practice on a monthly basis. Make sure that these bills are correctly reflected in Quickbooks. Often times if these seem higher or lower than normal your bookkeeper has entered the dates incorrectly. Try setting the monthly bills up as memorized transactions in Quickbooks so the dates is recorded correctly.
Monthly Income … Pull your financial information from your practice management software and ensure that the gross income matches the gross income that was entered into your Quickbooks information. You can find the gross income that was entered into Quickbooks on your Profit and Loss statement.
Monthly Discounts … Look at your practice management software and determine the total amount of discounts that were given away for the month. Make sure that this discount amount matches what your Profit and Loss statement says in Quickbooks.
Payroll … if you process payroll through Quickbooks take a quick look at your salary employees and ensure that the taxes that are withheld are the same each month. You can also check this information if you use a payroll company by pulling a detailed summary report.
Inventory … this is important if you use an accrual based accounting system but either way looking at your total inventory trends are important. If you use the accrual method you should see a monthly adjustment in your cost of goods sold section that reflects the change in your total inventory. For Example: If your total inventory at the end of the month was 10,000 and the previous month was 8,000 you will see a 2,000-inventory adjustment. If you were looking to decrease your inventory this may be reflected as a credit under your cost of goods sold or a debit if you were bulking up on inventory. If you do not use an accrual method, you can keep track of your total inventory in an excel file to gauge the trends.
Set aside an hour each month to review this information so you are better informed about your practices finances.