Planning your daily deposit reconciliation
Every day happy clients leave your office smiling. Before they step out your door, they swipe their debit or credit card, hand you a wad of cash or work out their insurance details for payment. All those payments in their various forms make their way into your patient management system -- job complete, right? Well, not so much…
Internal controls is a blanket term used for describing the policies and procedures you set up to safeguard your assets and cash from a financial perspective. It’s important that payment for all the work you do during the day ends up in the correct spot - in your bank account. In order to catch errors and minimize the risk of embezzlement, it’s your responsibility to make sure these controls are in place.
As the practice owner, here are a few things you can implement for internal controls:
At the end of the day your office manager or a front desk staff member should print the following:
- Daily deposit report from your Point of Sale (POS) system
- Daily deposit report from the patient management system
- Adjustment summary
Once you have those, run through them quickly (but carefully) to make sure that the POS system report matches the patient management system report and that any adjustments made make sense. Next, on a weekly basis jump into your online banking and do a scan through to make sure that all the payments have hit your bank account.
Quick tip: Technology today allows for cheque deposits via cheque scanner, so by giving someone access to only make cheque deposits in the account you can save yourself the time required to physically go and deposit cheques. This way cheque deposits will also make it into the account right away. Direct deposits made from your patient’s insurance companies are even better for your internal controls than cheques, we suggest utilizing this method whenever possible.
To save yourself a headache, and keep your daily reviews quick, make sure to deposit each days cash as a separate transaction-- so if you only go to your bank once a week, make sure Monday, Tuesday, Wednesday, etc. are deposited separately to save yourself from having to stop and make the calculations.We recommend depositing daily, both for ease of reconciling and for the safety of the cash. If this is not feasible, another option is to set a limit for the amount of cash you feel comfortable keeping in the office. A deposit can be made at the bank each time the limit is reached. If the money cannot be deposited that day, it should be transferred into a safety box. Once everything has been deposited, grab the deposit summary from your patient management system and ensure it lines up with the bank.
2. Review the production report daily
Most dentists don't review the day end report at all or leave the review to once a month, but if you leave the production review for too long it can be an incredibly hard task. Getting into the habit of reviewing this report daily will increase your chances of identifying errors. During these reviews make sure that any production write-offs \ adjustments that appear are correct and make sense.
Quick tip: We recommend separating the duties of the person who handles the transactions and that of the person who is approving write offs and doing the bank deposit. Having ownership of both tasks gives one person the power to approve write-offs and adjustments without any other persons review.
3. Define your petty cash procedure
Finally, pay attention to your petty cash. Petty cash can easily be missed, but it’s important that you include it in your internal controls. Make sure it’s counted and that there is an expense sheet that details any time the petty cash was used, and review this log along with your accounts receivable balance.
Internal controls shouldn’t be a challenge but they are important. If you do them on a regular basis you’ll save yourself a lot of time, reduce the chance of embezzlement and make the tasks a little easier. If it turns out you are not able to review them on a daily basis, make sure your accountant or bookkeeper does it for you.
Shift Accounting is dedicated to making our client’s daily accounting a breeze, How we do this is by running daily reconciliation and flagging any issues with deposits. If you need advice on how to best set up your clinic’s internal controls so they work for you contact us today.[/vc_column_text][/vc_column][/vc_row]