10.15.10 Issue #449 info@mckenziemgmt.com 1-877-777-6151 Forward This Newsletter

Nancy Caudill
Senior Consultant
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Balancing the Payments Daily?
By Nancy Caudill, Senior Consultant McKenzie Management

Case #390
Dr. Sam Brassfield

When Dr. Brassfield called the office, his primary concern was “lack of systems.” His focus wasn’t on the necessity to make more money or create less stress, work less days, etc. but for improving or creating systems that can be maintained throughout the life of the practice, regardless of the revolving door of team members.

McKenzie Management analyzes over 20 systems over a period of 12 months for our clients, or 10 systems over a 6-month period. The systems that are targeted depend on the needs of the practice. Managing the daily closing of the practice is always one of the systems that doctors request.

You Don’t Know What You Don’t Know!
Dr. Brassfield had no idea what steps were being taken at the end of the day to verify that the transactions being posted were correct. He knew how much money was going to the bank because a “Deposit Slip Report” was given to him, along with a “Daysheet” each day. However, he really didn’t pay much attention to it. Instead, he was more interested in his daily bank account balance that he checked online.

Here Is What He Didn’t Know
Now, before I disclose this information, I want to make this statement so there is no misunderstanding. Jane, his Practice Coordinator (he only employed one business person), was as honest as the day was long. At the same time, she “only knew what she knew” as well. The person before her, who was trained by the person before her, trained her! It is very possible that at some point in the past the correct procedures existed, but over time the system became “watered down” and now has no flavor at all.

  • The credit card payments were not reconciled with the computer print-out for CC payments
  • The cash was not balanced
  • The checks were not balanced

So what WAS she doing? She was taking the cash and checks out of the drawer at the end of the day, diligently writing down all the checks she had onto the bank deposit slip, adding up her cash and adding it to the top of the bank deposit slip, putting it into an envelope and sealing it up. She gave it to Dr. Brassfield and he took it to the bank on his way home. 

She knew that the credit card payments were deposited automatically into the bank, so she just took the signed receipts and put them in a separate envelope that she kept for them.  When the credit card machine reconciled at midnight, in the morning she took the reconciliation and placed it in the envelope, along with the other signed receipts for the month.

Here Is What Was Happening

  • Checks were given to Jane to pay on the patient’s account that were not posted to the patient’s ledger.
  • Patients were paying with cash and she posted it as a check. Since the patient was not given a printed receipt from the computer, they were not aware of the error.
  • Patients were making credit card payments and she would get busy and forget to post it to their account.
  • A check written in the amount of $100 was posted as $10 and vice-versa.

The good news is the amount of the monies going into Dr. Brassfield’s checking account was correct. The bad news is the patients’ accounts were incorrect. There were also occasions of credit or debit notices from the bank when a check was misread, causing the totals to be incorrect.

One hour prior to the office closing, start preparing the deposit for the day. The following steps should be taken:

  1. Print the Deposit Slip Report from the practice management software.
  2. Run a total of all cash, checks and credit cards for the day.
  3. Compare the total cash on hand to the cash that is listed on the computer’s deposit slip.
  4. Compare the total checks on hand to the total checks that are listed.
  5. Compare the total of the credit card receipts to the computer deposit slip. 
  6. Run a total from the credit card machine to confirm that it is the same total.
  7. On the bank deposit slip, write the total amount for the cash and checks and include a copy of the computer deposit slip with the cash and checks and place in an envelope with today’s date written on the outside.
  8. Staple the credit card slips and total to a copy of the computer deposit slip for the practice, along with a printed copy of the daysheet. Place on the doctor’s desk for review and then keep as long as recommended by the accountant.

Dr. Brassfield learned not to “assume” anything, and you shouldn’t either. Check with your business team to confirm that the proper steps are being taken to balance your payments every day and a deposit is being prepared to match the daily daysheet. You will be glad you did!

If you would like more information on how McKenzie's Consulting Coaching Programs can help you IMPLEMENT proven strategies, email info@mckenziemgmt.com.

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