Accounting Practices

Chapter 21ICBS 120

Computerized Systems The majority of medical offices are relying

on accounting software packages to prepare financial records, such as ledgers and reports, and to retrieve patient information

Medical office software packages have the capability of including the most common (CPT) and diagnostic (ICD-9) codes within a database to be recalled when completing insurance claim form or printing other computer-generated reports.

The Accounting Function Accounting is a system of monitoring the

financial status of a facility and the financial results of its activities.

Financial accounting provides information primarily for entities external to the organization such as the government

Managerial accounting generates financial information that can enable more efficient internal management

Cost Accounting helps to determine what it costs the clinic to perform particular services

Balance Sheet and Income Statement

The balance sheet is an itemized statement of the assets, liabilities, and owner’s equity of a medical facility as of a specified date.

The income statement shows the cumulative profit and total expenses for the month

Terminology Accounts receivable ratio – a formula that

measures the speed in which outstanding accounts are paid

Collected ratio – shows the percentage of outstanding debt collected

Cost ratio – a formula that shows the cost of a procedure or service

Accounts payable – unwritten promise to pay a supplier for property or merchandise purchased on credit or for a service rendered