Do you accept cash payments at your practice? The start of a new year is a great time to review how your practice handles cash — to determine if your internal controls could use some tightening up.
With cash, the biggest temptation is to handle these “small” amounts more casually than other payments. When cash payments are rare — a $30 co-pay here, a $25 co-pay there — it can seem that they’re less important to the bottom line. But, over the course of a year, even a single $30 cash payment per day amounts to close to $8,000! Keeping tabs on those “unimportant” cash payments is actually very important, indeed.
The biggest pitfall: mixing cash receipts with petty cash. This all but ensures these amounts won’t be deposited and may not be properly tracked. Petty cash should never be more than about $50 or so — just enough to handle small payment amounts for the office that cannot be handled by credit card or check. Allowing petty cash to grow creates a temptation for misuse — or worse, theft.
Cash should be deposited regularly — ideally, every day — for security and for effective tracking for practice evaluation and tax reporting. Receipt stock should be monitored, and the cash received should be reconciled against the day’s postings by some at the practice who doesn’t collect it and post it to the billing system (in smaller practices, this might need to be the physician/owner).