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Most communities have at least one bookkeeper who serves the local businesses. They make occasional visits to each client to update the books, prepare payroll, pay bills, and take care of whatever other tasks they’re expected to handle.

If you own a business or are preparing to open one, you might think the community bookkeeper is your only option. Not long ago that assumption would have been true but not so much anymore. In the modern internet age, it’s easier than ever to communicate and collaborate with people far away through the web. That means you can work with the best bookkeeper for you, no matter where they happen to be located.

Your local bookkeeper might do a perfectly fine job but you don’t have to settle. Advancements in technology have led to advancements in outsourced bookkeeping. Modern bookkeepers who use the latest software and other tools to serve their clients can bring major benefits to your business. Here are a few examples how:

Bookkeeping in real-time

Making an occasional visit to a client’s office is no longer a practical way for a bookkeeper to work.

Modern bookkeepers instead manage their client’s finances in real-time, using cloud accounting and bookkeeping software. They can access your general ledger from their own office and keep your books accurate and up-to-date at all times. You’ll always have insight into cashflow, helping you make smart business decisions. And your bookkeeper can identify and resolve any issues before they get worse.

A bookkeeper who understands your industry

One of the biggest downsides of traditional, local bookkeepers is they’re not always experts in the operations of the businesses they work with. They tend to take on all comers, which prevents them from developing an industry-specific specialization.

As technology has advanced, many modern bookkeepers that are able to serve clients remotely have carved out a niche for themselves. You should take advantage of this development and find a bookkeeper that is an expert in your industry. They’ll understand how your business operates, make suggestions on the best technology to implement, and let you know how you’re performing relative to similar businesses.

Better service at a lower cost

Modern bookkeepers who use cloud technology are often able to provide a wide range of services, with quick turnaround times. And they’re often able to do so at a lower cost than traditional bookkeepers.

This is because different cloud-based systems are able to connect and share data, reducing the amount of data entry that is required. For example, your point of sale system can automatically import daily sales transactions into your accounting software. Similarly, your invoicing software can update your accounting software when a customer pays an invoice. And your payroll software can automatically update your employee records for tax purposes.

The reduction in data entry means modern bookkeepers can focus on services that are more beneficial to you, like frequent bank reconciliation and financial reporting. They’re often able to charge less than bookkeepers who don’t use this technology because hours aren’t spent on tedious data entry.

Find the best partner for you

At the end of the day, the best bookkeeper for you is someone who you trust and like working with. Your local community bookkeeper might have those traits but if they don’t, you’re search doesn’t need to be constrained by geography.

Introduction

In today’s changing environment, a medical practice’s ability to ensure that revenue is maximized, and financial ‘leakage’ is minimized, is crucial to its economic success.  Maximizing revenue includes ensuring the appropriate level of payments against claims for every patient serviced.  Minimizing financial leakage is best achieved by implementing sufficient financial controls and oversight to ensure reconciled deposits across accounts and discouraging employee misconduct.  While most medical practices assume they have implemented the appropriate level of financial controls, independent analysis typically reveals a surprising level of losses stemming from not having the right checks and balances in place throughout the Service-to-Payment process.

Service –to–Payment Cycle

Figure 1 – Medical Practice Service-to-Payment Cycle – The service to payment cycle is the end-to-end process of servicing patients through to the receipt of payment for services renders from insurance companies.  The optimization of this process results in an overall increase in profitability to medical practices. The process can be optimized through the monitoring of defined control points throughout the cycle.

 

 The Service-to-Payment cycle is simply the end-to-end process of managing the receipt of revenues from services rendered to patients which includes:

Cash Payments Reconciliation – Practices which handle a significant amount of cash payments need to implement controls around the collection, recording, deposit, and reconciliation of funds.  Cash payments offer significant opportunities for funds to be mishandled or for employee malfeasance.   Best practices for handling cash payments include:Documenting each patient served through a sign-in sheet and recording the method of payment for service or co-pay.

  1. Documenting each patient served through a sign-in sheet and recording the method of payment for service or co-pay.
  2. Reconciling all payments collected by patients (Cash, Debit, Credit) against bank statements.
  3. Ensuring that all cash payments are totaled and reconciled daily with deposits at the bank. Cash payments should not be aggregated across multiple days to simplify reconciliation tracking for audit purposes.

Billing Assurance – Practices often miss filing insurance claims against all the patients serviced.  In larger practices, a 1 or 2% rate of missed claims can result in a significant loss of revenue.  These types of mistakes do not typically occur as a result of employee misconduct or malfeasance, but rather a natural error rate as a result of normal billing operations.     Charge differential, defined as the difference between standard pricing and charges for procedures issued below the pricing negotiated with individual insurance companies, also impacts a practice’s profitability.  This differential is typically difficult to monitor on an ongoing basis because it requires managing complex tables which track the billing agreements by current procedural terminology (CPT) code negotiated between the multitudes of insurance companies a practice interacts with.

Claims Assurance – Claims assurance is the management of claims from insurance companies to ensure that:

  1. All claims issued to insurance companies are paid.
  2. All paid claims are paid at the negotiated contract level with each Payer/Insurance company. This level is different for every Payer.

A critical area of claims assurance for medical practices is the analysis of adjustments on claims received from insurance companies.  Adjustments should reflect a standard discount received against a claim from a given insurance company and   should range from 20 to 50% based upon the CPT code.   A thorough analysis will typically reveal adjustments in the range of 75% or above, with a 100% adjustment meaning the insurance company has not paid anything against the claim.  Reasons for these high adjustments are multi-fold ranging from insurance company errors to rejection of claims due to input error from the practice’s billing staff.  While this information is available in the standard billing software utilized by medical practices, the rigorous analysis of the aging report and the ability to mine the data into ‘useful information’ is what proves more difficult for practice personnel.

Figure 2 – Claims Assurance Analysis – In this sample analysis of insurance adjustments, basic information has been analyzed using the practice’s billing software.  The $2.2M in revenue has been categorized into Patient Paid, Insurance Paid, Adjustments and Remaining Balance.  The $1.1M in adjustments have been further detailed into groups of <50%, 50-75%, > 75%, and 100% adjusted.  As can be seen from the table, the >75% and 100% adjustment buckets represent $732,798.

 

Rigorous Periodic Reporting and Analysis – Collectively, across the Service-to-Payment Cycle these shortcomings can add up to significant losses to practice ownership.  How does a practice address the collective pitfalls across the cycle?  Success is achieved through the thorough implementation of financial best practices across practice operations leading to effective management and corrective action.  Best practices include:

  1. Periodic (daily, weekly, monthly) exception reporting across the Service-to-Payment cycle to quickly identify issues and prompt corrective action.
  2. Independent oversight of controls to minimize conflict of interest.
  3. Periodic analysis and tracking of key performance indicators to establish performance baselining and to ensure their long-term results are being achieved.

 

Conclusion

Particularly in today’s fast-changing environment, medical practices and facilities need to challenge themselves to take a fresh look at their operations.  While office management may be reluctant to implement potential improvements, ownership clearly wants to increase operational efficiencies in order to mitigate the possibility of lost revenues.     While these conflicting interests between vested parties often create a reluctance to take a fresh, objective review of the current processes,    an independent analysis of operations can uncover and correct inefficiencies thereby increasing the practice’s profitability off of the existing patient base.

When most people think about bookkeeping and accounting, they would be hard-pressed to describe the differences between each process. In this article, the functional differences between accounting and bookkeeping are explained, as well as the differences between the roles of bookkeepers and accountants.

While bookkeeping and accounting share common goals, they each make up a different stage of the financial cycle. Read on for a look at what each process is comprised of.

The Function of Bookkeeping

Bookkeeping is the process of recording daily transactions in a consistent way and is a key component to building a strong business foundation.

Bookkeeping is comprised of:

  • Recording financial transactions
  • Posting debits and credits
  • Producing invoices
  • Maintaining and balancing subsidiaries, general ledgers, and historical accounts
  • Completing payroll

Maintaining a general ledger is one of the main components of bookkeeping. The general ledger is a basic document where a bookkeeper records the amounts from sale and expense receipts. This is referred to as posting and the more sales that are completed, the more often the ledger is posted. A ledger can be created with specialized software, a computer spreadsheet, or simply a lined sheet of paper. The complexity of a bookkeeping system often depends on the size of the business and the number of transactions that are completed daily, weekly, and monthly. All sales and purchases made by your business need to be recorded in the ledger, and certain items need supporting documents. The IRS clearly lays out which business transactions require supporting documents on their website.

Shifting Landscapes

It is interesting to note that since the advent of accounting and bookkeeping software, some components of the accounting process have been absorbed into the bookkeeping process. For instance, bookkeeping software is typically capable of building financial statements – blurring some of the traditional lines between the bookkeeping and accounting processes.

The Function of Accounting

Accounting is a high-level process that makes sense of information previously compiled, and produces financial models using that information. The process of accounting is more subjective than bookkeeping, which is largely transactional.

The process of accounting includes:

  • Preparing adjusting entries (recording expenses that have occurred but aren’t yet recorded in the bookkeeping process)
  • Preparing company financial statements
  • Analyzing costs of operations
  • Completing income tax returns
  • Aiding the business owner in understanding the impact of financial decisions

The process of accounting provides reports that bring key financial indicators together. The result is a better understanding of actual profitability, and an awareness of cash flow in the business. Accounting turns the information from the ledger into statements that reveal the bigger picture of the business, and the path the company is progressing on. Business owners will often look to accountants for help with strategic tax planning, financial forecasting, and tax filing.

The Bookkeeper Role vs. The Accountant Role

Understanding the difference between bookkeeping and accounting is empowering as a business owner, but it’s also important to understand the kinds of credentials accountants and bookkeepers have in order to determine how or when to use each. Read on for a look at what the roles of bookkeeper and accountant entail.

The Bookkeeper: Typically, bookkeepers are required to have between two and four years of experience or an associate’s degree. In order to be successful in their work, bookkeepers need to be sticklers for accuracy, and knowledgeable about key financial topics. Usually, the bookkeeper’s work is overseen by either an accountant or the small business owner whose books they are doing.

The Accountant: To qualify for the title of accountant, generally an individual must have a bachelor’s degree in accounting. For those that don’t have a specific degree in accounting, finance degrees are often considered an adequate substitute. Accountants, unlike bookkeepers, are also eligible to acquire additional professional certifications. For example, accountants with sufficient experience and education can obtain the title of Certified Public Accountant (CPA), one of the most common types of accounting designations. To become a CPA, an accountant must pass the Uniform Certified Public Accountant exam and possess experience as a professional accountant.

The Bottom Line

A successful marriage between bookkeeping and accounting will contribute to the long-term financial success of the business. Organized financial records and properly balanced finances produced by the bookkeeping and accounting processes are both key factors to this success. Some business owners learn to manage their finances on their own, while others opt to hire a professional so that they can focus on the parts of their business that they really love. Whichever option you choose, investing – whether it be time or money – into your business financials will only help your business grow.

Accounting outsourcing will help you in managing the accounting of your firm. Why does one need to outsource accounting? Read the article to find out.

Accounting outsourcing means to hire a firm or services for your business accounting rather than hiring full-time employees for that. Outsourcing some accounting portion of business is now a tradition especially for small and medium business. Hiring a full-time staff for receivable, payroll, calculation of taxes and paying salaries to them is more costly than outsourcing the section of the business or accounting and only pay for the accounting work.  The firms can spend their saved money on other important tasks like increased efficacy of the company and implement strategies to increase sale. Below are more benefits of outsourcing accounting:

  1. Reduced fraud: The chances of fraud increases in companies without CFO/controller. CFO/controller is a person who assesses and detects abnormal activity in the transactional data. Usually small business does not hire them, and the result is the fraud. Further, accounting controls are detected and prevent frauds up to 26%. After outsourcing, especially the small businesses can afford CFO/controller services can prevent loss.
  2. Reduced costs: Hiring a full-time accounting employee or part-time employees increase the cost and money spent on costly benefit packages. On the other hand, you only have to pay actual accounting fee it saves productivity and payroll costs. It is estimated that approximately 40% of the expenses can be saved per month after outsourcing the accounting.
  3. Save time for other important issues: Accounting itself is a complex and tedious process and looking after and checking for frauds etc. is another major task that needs time and energy. If you outsource your accounting, you will get enough free time for other tasks like bringing in new customers.
  4. Expert opinions: Outsourcing means that you are actually hiring experts for your business. They are well aware of all tax laws and other laws. They can accurately guide about tax information, full coverage to the accounting sections. Staffing options are also available on time when you need them. Companies to which you will outsource your firm’s accounting work will have qualified staff that can give you an expert opinion.
  5. A Professional Accounting: It is not always possible for one firm to hire many accountants and divide work among them. Accounting section deals with many issues like a tax return, cash flow, payrolls, etc. The chances of errors are always there. Outsourcing accounting means that you are hiring a decent team that double checks each other and ensure error free work.

 

Bookkeeping is a critical and challenging task. To save time and money, you can hire a bookkeeping firm, and they will handle all the bookkeeping tasks for you.

Bookkeeping is assumed to be a burdensome task for small business owners. They get nervous by the bookkeeping and also second-guess the knowledge and skills in fear of the Internal Revenue Service.  The bookkeeping is a crucial task, and you should not be intimidated or bored by the accounting. One quality of the successful business owners is that they do not view bookkeeping negatively and adopt a few procedures to stay on top of the paperwork. By this way, they manage to save time, money and a lot of stress.

Therefore, if you are looking for ways to improve the system, increase profit and reduce the expenditure of your business. Then one of the options is to hire a bookkeeping firm. We have mentioned below some of the ways in which bookkeeping firms save the time and money for you.

  1. Stay Updated on Business Spending

It is imperative for the business to stay up-to-date with business transactions and it can be very time consuming to catch up on neglected financial reports. Usually, the business owners are very busy with other aspects of managing the company that they don’t have time to do the monthly accounting, and their financial records are a mess.

So, bookkeeping firm by keeping records help the companies to stay consistent with tracking financial information regularly on a weekly or monthly basis.

  1. Tracking Business Write-Offs

Businesses need well documented expenses that fall within the category of write-offs, every year for tax preparations. As the tax time approaches every year, the bookkeeping firm can assist you to keep track of these expenses and prepare you to be ready for handing over the information to the tax preparer.

  1. Outsourcing of Payroll

The Payroll is an expense that adds up especially if you are spending the salary of an internal employee to handle the payroll processing. The bookkeeping firm helps business to save the time for other tasks by managing the outsourced payroll. Many streamlined systems are present and can be implemented to make the payroll outsourcing smooth and easy. These systems can be tailored according to the needs of your company to give you the professional service according to your requirements.

  1. Access to top systems

Outsourcing bookkeeping operations gives you access to the top systems and tools in the industry. Not every business can afford to pay for the expensive software or programs for their bookkeeping nor do they have enough time to keep up with changing laws and regulations. Bookkeeping firms purchase these tools and acquire the expertise in the knowledge of tool, so saving you the time and money. Moreover, these top tools create nightly backups and store the organized records and books for years.

  1. Scalability Option

Bookkeeping firms allows you to expand or cut back easily and quickly. If you want to grow your business or you want to cut down on the spending, you need to have a reliable team with effective plans and options to help you to achieve the goals. Bookkeeping firms providers provide the flexibility to quickly scale the business, thus saving the time and money for you.

Hiring the right bookkeeper is not an easy task. Here is a guide to help you in hiring the right bookkeeper.

Bookkeeper plays an important role the business. It keeps the record of your day to day transactions that include sales, salary, and expenses. Being a businessman, it is not always possible to have a sound knowledge of the process to manage receipts, expenses, and wages. Secondly, bookkeepers can guide you how well your business is growing. They can alarm you in any threatening situation.  Your bookkeeper also manages cash flow. A good accountant is responsible for advice, tax returns, and annual returns. So, hiring a good bookkeeper is fundamentally important. While hiring a bookkeeper, few things should be kept in mind. These are described as follows:

Understand your business requirement.

  • The first thing before hiring a bookkeeper is that you should understand your own business and its requirement.
  • If you are running a manufacturing business than the role of bookkeeper will be different as of service or retail companies.
  • You also need to evaluate the bookkeeping times. Many companies go for accounting software, so you must need an accountant well aware of these technologies.
  • Business reports are essential in every business. A bookkeeper can review these reports like profit and loss reports.

After understanding of the type of the business you are running and what would be the key responsibilities of your bookkeeper, you can look for a bookkeeper based on following tips.

Tips for hiring a bookkeeper

  • Firm or an independent bookkeeper? Understand your business: Booking keeping services are often offered both independently or by a firm. Based on your business requirements you can select a bookkeeper consultant or a outsource bookkeeping to a firm. You can also hire as full term employees your business needs.
  • Location matters!: If you are going for online accounting software, then you may hire a bookkeeper don’t exactly live nearby you, but yet you need to meet them off and on. So, it is important to decide the location before looking for a bookkeeper.
  • Friends can help you out: Your social network groups like LinkedIn can help you to find out a good, trustworthy bookkeeper or your friends can help you find the best firm or independent person.
  • Experience is the key: Bookkeeping don’t need any professional qualification like accountants, but certification is available. It is good if your prospective bookkeepers have done this under the professional governing body and have a substantial experience in working with a firm similar to you.
  • Choose the appropriate person for the company after checking all requirement qualifications and experience. You can also interview twice and select who fit for you. Do not choose only on the basis of qualification and expertise, here personality and qualifications skills also matter a lot.

Your bookkeeper would be like you co-pilot who fly your business with you. He/she is responsible for streaming your data coming from receipts, bills and other cash flow in your business and present it in a meaning full way.  They organize and properly file your data. They are the sailors and saviors of your business. So hire the right one and pay right.