Reporting is the most helpful tool to investigate if all the information was captured correctly and, after that, to provide valuable management information. The practice should generate relevant reports at regular time intervals. Those reports should be carefully analysed and interpreted so that the practice can respond timely to the information, by, for example:
- Confirming that all data was captured
- Making corrections
- Following up on outstanding debt
- Implementing new management decisions based on the information to make the practice more profitable.
WHEN TO DRAW REPORTS
Reporting at different time intervals fulfils different needs.
- Dailyreporting focuses on the details of the day's work so that month-end will be without delay or time spent to search for mistakes. Validating a single day's work, for which there is little data, is easier and faster than searching through a month's worth of data. The practice's cash flow will significantly improve if daily corrections are made
- Weeklyreporting aims to ensure that the income generated during the week is collected so that there will be enough cash flow to pay all expenses by month-end. Also, it is an excellent time to check if creditor invoices are correct and captured to pay creditors without delay and error at the end of the month. Finally, stock reports will help you order just enough stock to mitigate stock losses due to expiry
- Monthlyreporting allows the practice to make sure that budgets are adhered to so that it can plan and adapt its financial strategy
- Bi-monthlyreporting ensures that the bi-monthly VAT payment is performed so that no late fees and penalties become due
- Quarterlyreporting focuses on stock takes. If a practice adheres to the aforementioned best practice, the chance for losses resulting from mismanaged inventory is limited
- Yearly reporting aims to provide a comprehensive income and expenditure overview. One of the many benefits is that the different cost centre incomes and types of income can be analysed, so that management decisions can be applied to the next financial year to make the practice more profitable. If financial records are kept up to date regularly, the practice will save on audit expenses.
It is, therefore, clear that regular reporting is essential in the financial management of the practice.
HOW SPECIFIC REPORTS LEAD TO OPTIMISATION
A non-invoiced-bookings report can show the billing expert which services were rendered to patients but not billed. Once billed, drawing switch reports will enable the billing expert to make sure all claims were switched, and corrections were made based on the feedback of medical aids.
It is wise to compare pricing on your software system regularly. Sometimes incorrect pricing can lead to underpayment or overpayment of accounts. Undercharging results in medical aids paying less than they would have been prepared to pay and overcharging results in payments being made into patients' accounts, creating the unnecessary burden of debt collection.
If the practice regularly compares which codes were billed for which procedure, it will be easy to pick up if items were missed. The solution would be to use those reports to create combinations of all possible items that could be billed. It would be easier for the practitioner to delete items than to try and remember which items could be part of the procedure.
Optimised types of income
When drawing reports to understand which procedures bring in the most revenue, the information gained can lead the practice to focus on and market the most financially viable procedures and structure the practice's processes in such a way that personnel's workflow and diary management is optimised.
The practice can further increase income or decrease expenditure from non-patient sources if accurate financial reports are used to scrutinise these other sources. Examples would be to cut expenses by cancelling leases of premises of satellite practices that are too close together or sub-letting machinery that is no longer used or which could be shared.
Optimised debt management
The rule is: the longer an account is outstanding, the less likely a successful collection will be. As soon as a patient has been billed, the primary focus from a financial point of view is to make sure the income is received into the practice's bank account. Real-time claim submission feedback will help reception to request patients to pay balances before leaving the practice. In addition, payment links sent directly to patients from the patient-outstanding report, especially when sent after payday, can aid in the quick collection of outstanding invoices.
Part of managing debt is the outstanding debt of the practice. This typically happens when patients and medical aids pay, leaving a credit on the system. The sooner credits are paid back to patients or medical aids, the better the practice's cash flow.
Optimised stock control
To minimise stock loss, it is necessary to draw stock level reports to ensure that the practice only orders stock used by practitioners and the minimum amount of stock predicted based on the previous usage. Furthermore, the practice must make sure that items are sourced from suppliers whose pricing supports the practice's profit margins.
Optimised financial control
Finally, the monthly reconciliation reports will make sure that all transactions are accounted for, and the practitioner can see if there is enough income to cover expenses. If all financial transactions are diligently captured and imported into the software, the practice will save a lot on audit fees. Making payments to SARS will be a breeze, and the practitioner will be able to give a proper account to SARS.
This article has shown how consistently and correctly capturing all clinical and financial information in the software is the key to sound reporting. When reports are generated, correctly interpreted and applied to the management of the practice, it secures the practice's financial wellbeing.