As the healthcare industry blooms on a global scale, healthcare-related companies face the pressing need to manage their growing reliance on clear accounting and clean financing with ease more than ever. The demands for nurses and specialists increase while the regulations in the industry tighten, staying in business is faced with more hurdles to jump. What if I told you that Accounting is the key? Here are 3 healthcare accounting tips:
Accounting Tips for Healthcare Organizations
Track Your Cash Flow
While growth is regarded as a positive outcome, someti-][54mes it leads to costs that drain your revenue. This runs the risk of straining your finances in the red. At DeepSky, we maintain the rule of thumb that when you run out of cash, it’s game over. You end up bankrupt and broke. Profit, in this case, doesn’t equate to cash flow, and your business needs that cushion to thrive.
Although donors and sponsors can add cash and capital to your business, it runs the risk of leaving you in the dark and leads you to turn a blind eye to the real problem. The ability to determine what’s causing the increase in costs as your company grows is the best predictor to avoid running dry of cash. Build a solid financial foundation, then you will have the means to increase cash flow from there.
Calculate Turnover Regularly For Specialized Positions
Nurses, for example, possess one of the highest turnover rates due to the nature of its demanding work. The Nurse Sensitive Indicators estimates that the average turnover rate for nurses is 17.1% within the United States, which is a relatively high rate compared to other developed nations. Meanwhile, the New Mexico Legislature has estimated that the high turnover rate leads to $300,000 of loss for hospitals. So, if your company hires nurses and specialists prone to high turnover rates, ensuring their stay should be your top priority.
Implement Safeguards For Fraud
Rigid regulations and rules to penalize fraud are set in place in the healthcare industry. Accounting is no different. Deepsky has pointed out instances of how people who track books can identify red flags.
A common example of fraud is asset misappropriation. This refers to the use of a company’s assets for personal gains. Including loss of funds due to misuse of inventory, fraudulent disbursements, use of office credit cards for personal expenses, and other forms of stealing.
The best prevention is to have a system in place to alert you even if you trust your employees. A good accounting system ensures that billing is accurate for patients and relevant government agencies. Assess if medical referrals are necessary for the person living with illnesses. Go the extra mile to double-check credit card statements and receipts and always track usage of medical equipment.
Where Do I Start?
Once a system is in place to prevent fraud, the rest would be smooth sailing. But to kickstart such a system can be difficult if you’re unfamiliar with the field. Feel free to drop us a line and we will see how we can help!