Healthcare Accounting & CPA Services
Mention healthcare accounting and everyone thinks there is nothing to it, any person with a basic level of intelligence can easily manage, everyone is trustworthy, and it’s nothing more than reconciling the bank account, writing a few checks, and processing payroll checks with a computer that does all the calculations. So why do so many healthcare businesses find themselves with no cash, a significant amount of unpaid bills to vendors and the accounting records in such a mess that it will cost a small fortune for someone else to come in and make sense of the whole thing? The problem is rooted in the perspective of the decision maker as to the level of knowledge required by their bookkeeper. Bringing it all together is more akin to putting puzzles together. I have encountered many individuals that had the requisite technical training but lacked the common sense to bring it together.
The preparation of a balance sheet and income statement is vital to the financial management of any medical practice. The balance sheet is an indicator of a practice’s assets, liabilities, and equity. The income statement summarizes the practice’s income and expenses, resulting in a bottom-line net income figure. Medical practice financial statements generally are used for three purposes: (1) tax planning, (2) overhead control, and (3) internal control. Financial statements are prepared either monthly or quarterly, the frequency often depending on the practice’s size and management needs. Financial statements for medical offices often are prepared on the income tax basis of accounting, since most industry statistics report income and expense on the same basis. This should not be confused with the cash basis of accounting, which requires adherence to all accounting principles except for the recognition of income and expense. The income tax basis of accounting deviates from the cash basis of accounting in many respects. The biggest differences concern the methodology for calculating depreciation expense and the amortization of intangibles. The manner in which certain prepaid expenses are recognized will also differ (e.g., in the case of the annual payment of a malpractice premium).
In addition to medical practice financial statement preparation, I also offer the following healthcare accounting services:
- Review of internally-prepared Quickbooks financials and related transactions
- Internal control and embezzlement reviews
- Preparation of personal financial statements
- Assist with bank financing and preparation of loan packages
- Payroll processing
- Interim controllership services
- Accounts payable processing
- Property tax protest
- Budget preparation and analysis
- Accounting training for medical practice employees
- Management reporting and interpretations
- Overhead review and control
- Accounting benchmarking
- Independent bank reconciliations
- New medical practice formation
In many clinical situations, the numbers are information. In business situations, most numbers are data – the value I as a physician CPA brings to your medical practice is applying my knowledge, experience and judgment to turn data into information, information that will be the basis for your current and future decision making.