{"id":29,"date":"2023-09-28T19:15:50","date_gmt":"2023-09-28T19:15:50","guid":{"rendered":"https:\/\/www.medical-accounting.com\/blog\/?p=29"},"modified":"2023-09-28T19:15:50","modified_gmt":"2023-09-28T19:15:50","slug":"top-5-mistakes-to-avoid-in-medical-accounting","status":"publish","type":"post","link":"https:\/\/www.medical-accounting.com\/blog\/top-5-mistakes-to-avoid-in-medical-accounting\/","title":{"rendered":"Top 5 Mistakes to Avoid in Medical Accounting"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Ensuring accuracy and efficiency is critical when it comes to managing a healthcare practice\u2019s medical accounting. Small errors lead to long delays and impact the available cash flow for the practice. It upsets patients and limits the success of any business over the long term.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Avoiding the following five common mistakes in <\/span><a href=\"https:\/\/www.medical-accounting.com\/medical-practice-accounting-services.htm\"><span style=\"font-weight: 400;\">medical accounting<\/span><\/a><span style=\"font-weight: 400;\"> could lead to better, more efficient practices.<\/span><\/p>\n<p><img decoding=\"async\" loading=\"lazy\" class=\"alignnone wp-image-15 size-full\" src=\"https:\/\/www.medical-accounting.com\/blog\/wp-content\/uploads\/2023\/09\/image-1.png\" alt=\"\" width=\"1200\" height=\"630\" srcset=\"https:\/\/www.medical-accounting.com\/blog\/wp-content\/uploads\/2023\/09\/image-1.png 1200w, https:\/\/www.medical-accounting.com\/blog\/wp-content\/uploads\/2023\/09\/image-1-300x158.png 300w, https:\/\/www.medical-accounting.com\/blog\/wp-content\/uploads\/2023\/09\/image-1-1024x538.png 1024w, https:\/\/www.medical-accounting.com\/blog\/wp-content\/uploads\/2023\/09\/image-1-768x403.png 768w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><\/p>\n<h2><b>Mistake #1: Not Maintaining Accurate Financial Records<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Poor maintenance of financial records minimizes a practice\u2019s ability to stay on top of the financial health of the organization. The consequences of poor record-keeping often include:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Missed payments<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Lost revenue<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Frustrated employees and other stakeholders<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Improving record-keeping at any level minimizes losses. To do this, start by:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Creating sound medical record-keeping procedures to use office-wide<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Ensure employees have ample training in the importance of medical record keeping and procedures<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Ensure labeling is consistent and done readily<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Automate any processes you can<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Improve data security to minimize risks<\/span><\/li>\n<\/ul>\n<h2><b>Mistake #2: Failing to Understand and Comply with Tax Laws and Regulations<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">All healthcare practices must navigate the complexity that often comes from tax laws and regulations. There is no better way to stay up to date on these strategies than to hire an experienced accountant to help with tax management.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Some common mistakes include:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Not maximizing retirement contributions<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Not taking all eligible donations<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Classifying the business incorrectly<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">While all practice leadership should have some understanding of the revenue and tax requirements, it is often the furthest from a doctor\u2019s mind when caring for patients. Yet, staying up-to-date, including monitoring the <\/span><a href=\"https:\/\/www.irs.gov\/newsroom\"><span style=\"font-weight: 400;\">IRS website for updates<\/span><\/a><span style=\"font-weight: 400;\">, can help avoid challenges.<\/span><\/p>\n<h2><b>Mistake #3: Not Separating Personal and Business Finances<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">All finances for the practice must be separate from personal expenses. From the start, practice owners must create separate business checking accounts to manage both income and expenses. Mingling personal and business funds clouds the line of liability. Should a creditor try to seek a claim against your practice, and mingling of finances like this is occurring, it could put personal assets at risk.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Consider the following tips:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Create separate business and savings accounts<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Set up payroll to pay all parties within the business for the services provided<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Establish a business credit card for business-related purchases<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Ensure separate accounts are in place for each practice location<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Talk with an accountant about any current combination of personal and business expenses<\/span><\/li>\n<\/ul>\n<h2><b>Mistake #4: Underestimating the Importance of Budgeting and Forecasting<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Businesses need to keep a close and consistent eye on cash flow, the money coming in and the money going out. While monitoring cash flow is essential, so is having an accurate budget to follow.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Your budget should be based on forecasting, a process that looks at the expected revenue of the organization over a set period of time. Without a budget and some idea of what your company\u2019s financial health is at any given time, your practice cannot adequately grow.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">With this insight, companies know what\u2019s helping them to become profitable and what opportunities exist for potential improvement.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Some key aspects to keep in mind here include:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Utilize automation and software to help streamline budgets<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Create an accurate budget based on real expenses<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Set realistic objectives<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Ensure that any profit and practice growth is based on accurate data and analysis<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Factor in unforeseen challenges and requirements<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Work with an accountant to structure a budget based specifically on your organization<\/span><\/li>\n<\/ul>\n<h2><b>Mistake #5: Relying Solely on Accounting Software for Financial Management<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Software is one component of creating sound financial management, but it does not replace the work, insight, and guidance that a full-service solution offers.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Many practices fall victim to using a simple-to-use software tool that offers only as much information as you feed into it. It cannot take that data and provide guidance or ensure accuracy, especially if errors are present or the data isn\u2019t complete.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Consider these best practices for using accounting software alongside other tools:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Ensure strategies are in place to pinpoint areas of risk \u2013 such as conducting routine audits to ensure data is complete and accurate<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Utilize the most up-to-date resources, which often means updating software consistently to ensure security, data accuracy, and program reliability<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Utilize experts who can provide insights and resources to help practices with growth projections, analysis, and challenge management<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Having a team of professionals who can oversee the company&#8217;s medical accounting allows you to harness your software in the most effective way possible.<\/span><\/p>\n<p><img decoding=\"async\" loading=\"lazy\" class=\"alignnone wp-image-14 size-full\" src=\"https:\/\/www.medical-accounting.com\/blog\/wp-content\/uploads\/2023\/09\/image.png\" alt=\"\" width=\"1200\" height=\"630\" srcset=\"https:\/\/www.medical-accounting.com\/blog\/wp-content\/uploads\/2023\/09\/image.png 1200w, https:\/\/www.medical-accounting.com\/blog\/wp-content\/uploads\/2023\/09\/image-300x158.png 300w, https:\/\/www.medical-accounting.com\/blog\/wp-content\/uploads\/2023\/09\/image-1024x538.png 1024w, https:\/\/www.medical-accounting.com\/blog\/wp-content\/uploads\/2023\/09\/image-768x403.png 768w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><\/p>\n<h2><b>Don\u2019t Overlook Your Medical Accounting<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Your medical accounting is one of the core operational components of running your practice. Ensure that you are staying up to date not only on business best practices and IRS changes but also on the use of:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Automation<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Accounting software<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">New insights into the industry<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Accurate, effective financial management is the only way to structure and build a business model that lasts.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Your medical practice needs support as it grows and expands throughout this process. Sorenson &amp; Company, CPA, can help by providing insight, guidance, support, and solutions to your biggest operational challenges. <\/span><a href=\"https:\/\/www.medical-accounting.com\/contact.htm\"><span style=\"font-weight: 400;\">Contact us<\/span><\/a><span style=\"font-weight: 400;\"> now to learn how.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Ensuring accuracy and efficiency is critical when it comes to managing a healthcare practice\u2019s medical accounting. Small errors lead to long delays and impact the available cash flow for the practice. It upsets patients and limits the success of any business over the long term.\u00a0 Avoiding the following five common mistakes in medical accounting could [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":12,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.medical-accounting.com\/blog\/wp-json\/wp\/v2\/posts\/29"}],"collection":[{"href":"https:\/\/www.medical-accounting.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.medical-accounting.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.medical-accounting.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.medical-accounting.com\/blog\/wp-json\/wp\/v2\/comments?post=29"}],"version-history":[{"count":1,"href":"https:\/\/www.medical-accounting.com\/blog\/wp-json\/wp\/v2\/posts\/29\/revisions"}],"predecessor-version":[{"id":30,"href":"https:\/\/www.medical-accounting.com\/blog\/wp-json\/wp\/v2\/posts\/29\/revisions\/30"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.medical-accounting.com\/blog\/wp-json\/wp\/v2\/media\/12"}],"wp:attachment":[{"href":"https:\/\/www.medical-accounting.com\/blog\/wp-json\/wp\/v2\/media?parent=29"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.medical-accounting.com\/blog\/wp-json\/wp\/v2\/categories?post=29"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.medical-accounting.com\/blog\/wp-json\/wp\/v2\/tags?post=29"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}