How To Cleanup Accounts Receivable for the End of the Year
The end of the fiscal year has arrived. Now is the perfect time for a thorough accounting cleanup. On paper, cleaning up your books probably doesn’t sound like the most appealing idea. After all, you’re likely buried in end-of-year statements, financial reporting, and other critical assignments at your health facility. Still, a well-executed accounting cleanup can only lighten your workload.
Planning and implementing a bookkeeping cleanup checklist reduces stress and boosts your productivity in the busy year-end period. With a solid workflow and pristine account records, balance sheets, and bank records, the closing process becomes less of a hassle and a more confident, by-the-books affair.
Keep reading to learn how detailed accounting cleanup can strengthen your year-end closing process.
Why the Year-End Closing Process Matters
The year-end close is when a practice or hospital reviews, reconciles, and verifies its financial statements and transactions over the last year. Everything must add up to ensure the continued growth and organization of the practice. Medical professionals calculate their fixed assets, bank accounts, accounting books, cash accounts, cash flow, income statements, and more before moving ahead.
Messy books can lead to:
- Increased denial claims
- Fees and other penalties for inaccurate accounting records
- Inconsistencies in the accounting process
- Missed tax deductions and credits
- An inefficient health system
- Wasted time
- Decreased productivity
A well-planned bookkeeping cleaning process can save practitioners a headache when external auditors request their official financial records. Giving messy books to an auditor can damage your reputation and result in exorbitant fees. Taking the time now, when you’re in the midst of the year-end cycle, to order your accounting process and bookkeeping services is proactive and strategic.
Common Challenges of Accounting Cleanup
The cleanup of your accounts receivable and other matters is easier said than done. The end of the fiscal year is also one of the busiest times. Your practitioners are torn between providing quality care services and ensuring all accounting records are solid—tossing a cleaning checklist on top of all that can feel like an impossible workload.
However, a strategic cleanup process can address and reduce many of the challenges you struggled with throughout the year. A comprehensive cleaning strategy can help you resolve:
Interrogating employees about missing, inaccurate, or incomplete documentation is frustrating and bad for morale. Carrying out the process at the end of the fiscal year in what is already a high-tension environment is counterproductive. Cleaning up your records before you need them can eliminate unnecessary friction and improve long-term communication across departments.
Missing Invoices and Records
Keeping track of invoices and patient records is challenging when you have care services to provide and other objectives to pursue. Regardless, maintaining these assets is essential when it comes time for the year-end closing process. Poor document hygiene results in delays, increased denied claims, and unexpected expenses.
Medical professionals are some of the busiest individuals in the world. Providing quality care takes incredible focus, passion, and patience, and it takes a toll. No one is perfect, and managing mountains of documentation alone on top of everything else is a massive undertaking. Misplacing a balance sheet or financial statement is an honest mistake that can have significant long-term consequences.
Is your medical system outdated or unoptimized? Horizon Healthcare RCM can help you review your policies and procedures and improve the patient experience.
Make Professional Life Easier With an Accounts Receivable and Bookkeeping Cleanup Checklist
Accounting cleanup is your chance to adjust your books and correct errors to improve the effectiveness of your year-end closing process. You should be prepared to plan, research, and identify root errors. Remember that messy books don’t resolve themselves—unaddressed mistakes compound over time and lead to more expensive consequences.
Unsure where to start with your cleaning process? Start with this bookkeeping cleanup checklist:
Purge Outdated Data
Patient data can become unwieldy over time. Your practice is constantly taking in new patients, and your health system can quickly be overwhelmed if you haven’t kept your records up to date. To prevent inaccuracies, your employees should ask visitors to verify their patient information and insurance data every visit and update your records constantly.
Get rid of data from patients no longer with your practice and investigate missing compensation from defunct payers. It may be easier to remove small balances as losses, but if you’re missing large sums, it may be worth elevating the issue and pursuing reimbursement.
Collect From Active Patients
Prevent aged balances by requesting payment from current patients. It’s easy for existing payments to get out of control when patients don’t understand their full responsibility. Bills end up in the mail, unaddressed. Provide your front desk attendants with the tools and information they need to procure payment on a patient’s appointment. Check for balances the day before an appointment and educate your patients on their responsibility before they arrive.
Train your staff on communicating effectively with patients and cultivating positive relations with them. Be firm about outstanding balances and keep track of the situation to ensure your cash flow remains healthy.
Research and Plan
You should always have a plan before you address accounting issues at your practice. Health systems are robust, and any entry you alter is bound to affect another account. Build a strategy and gain visibility on your system to ensure the proper order of adjustments and avoid implementing redundant or ineffective solutions.
Implement the Bookkeeping Cleanup Solution
Clean up your books routinely and ensure your professionals understand medical billing and accounting processes. The occasional cleanup won’t cut it—you need a comprehensive strategy that ensures you stay ahead of potential disorganization. To prevent future issues, invest in your accounting process and documentation procedures, so there’s no doubt your financial statements are accurate and fully detailed.
Improve Your Year-End Closing Process With Horizon Healthcare RCM
Denied claims and messy books can create an unnecessary headache for your practitioners during the busiest time of the year. Horizon Healthcare RCM can reduce your stress by helping you establish an up-to-date billing service strategy to improve your accounts receivable management and revenue cycle maintenance.
Our solutions are scalable, customizable, and flexible. Our coders and billers take a deep dive into your health system and strengthen your procedures, so you don’t struggle to follow up on collections or set the record straight for the end of the fiscal year.
Ready to secure your cash flow? Reach out today.