10.10.14 Issue #657 info@mckenziemgmt.com 1-877-777-6151 Forward This Newsletter

Nancy Caudill
Senior Consultant
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How to Prepare Your Bank Deposit
By Nancy Caudill, Senior Consultant

Do you, the doctor, balance your own bank statement each month, or do you have a bookkeeper or accountant who completes this task? It is always a challenge to balance your practice management’s total collections for the month to your bank statement and/or P&L. Typically, your accountant extrapolates the income line on the P&L from your bank statement, and 9 times out of 10 this will not match your software’s deposits. Have you ever wondered why not? Let’s review how deposits should be handled to assist in the process of balancing the P&L or bank statements to your practice’s software.

Electronic Transfer of Funds
Many practices accept payments that are automatically transferred into your bank account from insurance companies. I would suggest that you NOT accept Electronic Transfer of Funds (EFTs), as it will make it impossible to balance your bank statement to your PM software. It also means that your Financial Coordinator must post those payments daily (as the notice comes in from the insurance carrier) and not let them build up. I have worked in offices where the business team felt entering the payments into their PM software was not important because all the doctor cared about was money being in the bank. This may be true, but statements and refunds can’t be managed until these payments are posted to each account.

With many of the ETFs, in order to create an Explanation of Benefits (EOB) your business team must manually print the EOB from the emailed report sent from the insurance company. This takes time and supplies. Should you feel that the timeliness of the deposit to your bank account outweighs the importance of reconciling your bank statement and preparing an accurate daily deposit, then at least make sure that payments are posted daily to patient accounts.

When to Prepare Deposits
Deposits should be created DAILY! This means that a deposit report from your PM software should be generated after all payments are posted for the day, and this report should be compared to the reconciled credit card receipts, cash and checks. Some PM softwares will suggest that you have two types of deposit reports and I agree – one that shows actual monies taken to the bank (cash and checks) and a different report for credit cards and electronic transfers (if you have any from the insurance companies). 

When does your business team actually take the deposit to your bank? This depends on the hour that your bank closes. If your business team can balance and prepare the deposit and take it to the bank at the end of the day, that is just fine. If you take it daily, that is fine too. Some offices take it to the bank the next morning. Whichever option you choose, be consistent. If the deposit is made the next morning, it will have that date on the bank statement, even though the deposit is actually from the previous day in your computer. Same if the deposit is made the same day.

The Daily Deposit
The first deposit report from your PM software should be printed and kept in a binder or saved as a pdf file. This deposit report should match the total cash and checks that are taken to the bank. The old-fashioned duplicate deposits are still the best way to manage and balance. The deposit slip is prepared with the following information: the TOTAL of the checks, the TOTAL of the cash and then the TOTAL of the deposit. There is no reason to itemize each check – that is why you have a report from your PM software. The bank does not need this information.

When the deposit is presented to the bank teller, a receipt is given back. This receipt should be attached to the “yellow” carbonless copy of the prepared deposit in your deposit book in the office. Do not remove both copies when the deposit slip is prepared, only the original that is added with the cash and checks.

The second deposit report illustrates the total credit card payments and should also balance with all the signed receipts from the patients in the office, any telephone receipts generated and made by mail AND the close-out of the credit card machines. If you have more than one credit card machine, each machine must be closed out and the totals of the machines reconciled to the second report. This is very important. All of the receipts and credit card machine close-outs should be attached to the report showing that it all balances. If it does not, something is wrong. Fix it ASAP!

The Bad News
You still won’t balance unless you don’t accept credit cards. Credit cards don’t settle for 2-5 days (depending on the credit card company), so your totals for credit card payments made during the last 2-5 days of the month will be off. This means when you are comparing your bank statement or P&L to your PM deposit for the month (or the collections or payment report), your balance will be off by those credit card payments that were posted in your office the last couple of days. You will need to manually pick up the credit card payments for those last few days on next month’s statement or P&L.

Happy Balancing!

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