Accounting and Bookkeeping for Doctors
Accounting and Bookkeeping for Doctors
Accounting as a function in ubiquitous in all the fields of business. It may have different formats and systems in different types of organisations. But the end goal is the same, that is to analyse the financial position of the business at the end of certain period, say a year.This is where accounting comes in handy to doctors.
A doctor also has to pay taxes, collect taxes in behalf of the government. He also has to have a good accounting track record so that he can take measures to enhance his profits. If he is not able to maintain bookkeeping, the doctor will not be able to ascertain the profits or losses which he is making from his establishment.
Nowadays there are many software in the industry which are specifically built for accounting for clinics and hospitals. These are customizable to an individual’s needs.
Things to be taken care
Make sure there are written records of all the patients visited in a day and the revenue collected from them. Keep trained staff who can record all the transactions and keep the documents collected handily. Any mistakes of commission or omission if caught, can lead to adverse situations. Your accountant should be competent enough to catch if there are any mistakes in your records.
Your clinic might have partnerships with various health and accident insurance providers to give preferential services to the clients of these insurers. But how do you make sure that you are taking in a patient who is a bonafide client? You keep detailed records of the patients you serve. Have direct contact with the representative of insurance companies. Inform them when a patient asks for cashless service. Always contact the company when you think a fraudulent transaction is being done.
Time billing is the concept of charging your patients with a specific time rate. For example, you can bill a patient with a rate of Rs. 500 per hour. If a patient takes 30 minutes of your time, the bill for him is Rs.500*30/60 = Rs.250.
This concept is relatively less used. There’s a fixed charge usually for a consultation. The caveat in using time billing is that you have to take into account all the costs and take out the cost per hour of your establishment and then charge a markup to it, arriving at the charges. But as you are providing a service, it is difficult to arrive at a time billing procedure.
Invoicing is very important. There might be corporate clients who might want compulsory invoices to be sent to them. The clinical establishment should have a proper invoicing system in place. Preferably, it should be automated or software based. Minimum human interference should be required. The breakup of all the charges should be mentioned properly. Charges for all the various services provided, medicines given if any plus any taxes should be properly mentioned. If you have to charge taxes, the percentage of taxes and the amount collected as taxes should be clearly disclosed. The invoice should also follow all the applicable rules and laws of the land.
Sales tax is charged over and above the cost of your services which you provide. Sales tax takes many forms in different countries. In India, Goods and Services Tax has replaced all indirect taxes. Almost all healthcare services in India are out of the ambit of GST. But some are chargeable to tax. Tax evasion in transactions which are done with cash is rampant. The rate to charge the tax can be different for different services or procedures. All such services or procedures should be revealed on the invoice.
Appointment scheduling integrated with billing
software which can handle appointment scheduling and billing of patients can come in very handy. If you charge by time billing, the software is highly effective. The time spent in the clinic will be clearly mentioned. Softwares are now capable of handling all the functions one requires in business with ease.