Internal Control Checklist for Medical PracticesOctober 28, 2014
Key components of an effective internal control structure.
In the medical world, the need to optimize controls over assets and cost management becomes more necessary as operating margins tighten. The main purpose of internal controls within a medical practice is to offer physicians and managers considerable feedback on their facility’s effective and resourceful operating tactics. Internal control over cash and other operating assets promotes efficiency and works to minimize the risks of unlawful use, acquisition or disposition of assets by unintended personnel.
7 Essential Questions for every Medical Practice Owner
It is necessary for every owner within a medical practice to analyze their current operations and habits and work to find better ways to manage costs, revenues, and employees. There are a number of questions that every owner should ask him/herself to ensure the best possible internal control system:
- Do you receive the bank statement directly and examine the bank statement to spot any unusual transactions, automated clearing house (ACH) withdrawals, or wire transfers?
- Is there any chance that the person opening the mail is able to make a write-off of accounts receivable on the billing system? ** Try to have someone open the mail and stamp all receipts “FOR DEPOSIT ONLY” to avoid the opportunity for a person to record a write off and personally deposit your checks.
- Have you requested background checks on all employee hires, most importantly the financially associated people?
- Have you reconciled patient accounts receivable ledger to deposits in the checking account?
- Have you thoroughly analyzed credits on patient account balances?
- Have you confirmed that wire bank transfers can only be initiated through a written, NOT oral authorization signed by at least one owner? ** Ask for a copy of the banking resolution from the bank for a detailed list of the legal responsibilities of the bank concerning that account.
- Have you made sure that everyone within the practice uses their vacation time? Make sure someone else is doing their job while gone as this can be a double check on what is going on in the practice.
In order to improve operations and boost company morale, it is vitally important that you create an effective internal control structure. To ensure that the organization’s overall goals and objectives will be achieved, policies and procedures in the internal control structure must be established, practiced, and maintained.
For assistance with an internal control analysis, please contact any member of our Healthcare Services Group.