Tag Archives: accounting

December 22, 2016

QuickBooks Online & HIPAA: What I’ve Learned (so far)

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Lately, I’ve noticed an uptick in clients from the health and wellness industry wanting to move to the cloud.  QuickBooks Online is such a GREAT fit for this industry, but there are some things you should know.

Per Intuit’s support community:

“Currently, QuickBooks Online (QBO) meets industry standards for online security, but is not compliant with the HIPAA standards for privacy. If you are a health care professional using QBO, it is not recommended that you enter in ‘individually identifiable health information.’…We don’t have any further information on this subject, and we’re not equipped to advise you. For more information on the subject, as well as to seek legal advisement regarding this issue, go to: http://www.hhs.gov/ocr/hipaa/.”1

…and that’s all they have to say ’bout that.

So, where does this leave medical offices that need to comply with HIPAA but want to leverage available technology?  My recommendation is always to keep your protected health information secured within your HIPAA-compliant medical billing software.  QBO can do invoicing, but it isn’t designed for medical billing.  Handling insurance invoices, cash payouts, deductibles, and co-pays are best left to your existing software.  Seek out other clinics within your industry and ask them what they use.  What do they like about it?  What would they change about it?  What’s the most cost-effective for you?

That being said, there is nothing preventing you from SUMMARIZING your revenue in QuickBooks Online by using sales summary receipts or invoices to record your revenue by service, insurance company, or event patient type.  As long as the information being entered is not “protected health information” you are in the clear.  The definition according to the US Department of Health & Human Services is

“…information, including demographic data that relates to:

  • the individuals past, present or future physical or mental health condition,
  • the provision of health care to the individual,
  • the past, present, or future payment for the provision of health care to the individual,

and that identifies the individual or for which there is a reasonable basis to believe it can be used to identify the individual.  Individually identifiable health information includes many common identifiers (e.g., name, address, birth date, Social Security Number).”2

So, though you may not be able to look up the precise amount of John Doe’s care to date in QuickBooks Online, you can still see how your clinic is performing by comparing month to month, year over year, etc.  You can check your gross margin by comparing your revenue received from a certain treatment vs. the expense associated with performing the treatment.  Tracking how much business is coming in from insurance companies vs. how much comes in from cash-paying patients can help make decisions about marketing and growth strategies.  All of these metrics (and many more) are possible while using QuickBooks Online in conjunction with medical billing software.

As much as accountants like me would like to see our software become HIPAA-compliant and be the end-all be-all for all industries, in some cases (such as this one), it’s best left to the experts.  Any accountant or bookkeeper that is hired to take on the task of managing your books should be willing, at a minimum, to sign a “Business Associate Agreement/Contract” (a sample can be found here: https://www.hhs.gov/hipaa/for-professionals/covered-entities/sample-business-associate-agreement-provisions/index.html) in order to access any of your software that may contain protected health information.

Partnering with an accounting professional who specializes in accounting for the healthcare industry is a sound investment in the prosperity of your business and will likely be your best bet in ensuring your clinic and staff remain HIPAA-compliant.  Dynamic Bookkeeping loves working with medical professionals and would be happy to assist!   Click here to schedule a quick phone call to see if we may be a good fit!



August 22, 2016

Internal Controls: Why They’re Important

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When you hear the term “internal controls,” what comes to mind? Auditors hovering over mountains of paperwork while you sweat bullets? Creating a bunch of needless, extra work? Suits and ties, Yes Men, Sally from Accounting breathing down your neck for not following protocol? I totally get it; that’s where my brain was, too.

According to the Wikipedia definition, “Internal control, as defined in accounting and auditing, is a process for assuring achievement of an organization’s objectives in operational effectiveness and efficiency, reliable financial reporting, and compliance with laws, regulations and policies. A broad concept, internal control involves everything that controls risks to an organization (https://en.wikipedia.org/wiki/Internal_control).”

When broken down simply, Internal Controls is just the formal phrase for making sure your organizational ducks are in a row. Most medium- to large-sized businesses have some form of this or another. Once shareholders, donors (in non-profit organizations), and multiple stakeholders enter a venture, it’s impossible to run a tight ship without them. Small businesses, on the other hand, typically don’t worry too much about instituting internal controls. I’m going to share with you why you should.

  • It will force you to look at your workflow. In order to implement controls, first you have to look at your current processes to see what you already have in place and what needs adjusting. How do you receive inventory? Do you match the shipping document to your purchase order to make sure everything came through right? Do you just pull everything out of the box and throw it on the shelf? Do you take a regular count? If you don’t have a basic workflow for something like inventory each and every time a box crosses your door, you may be losing money on lost, stolen, or missing product. Instituting internal controls (i.e. a defined, repeatable workflow) will help minimize shrinkage. Another huge bonus? Now you have a process in place to teach current and future employees that is repeatable and scalable. Less room for error, more time for sales!
  • An extra set of eyes. Does Tony open the bills, write the checks, sign the checks and then mail them back out? How do you know Tony has the right amounts? Or that the bills coming in are accurate? Or that Tony isn’t just writing himself checks? A great rule of thumb in dealing with cash/checks/finances in general in your business is to make sure NO PROCESS INVOLVES ONLY ONE PERSON START TO FINISH. If you have processes that start and end with one employee, it’s time to take a step back and see how you can interject yourself or other trusted advisors to double check work to ensure accuracy and to prevent fraud. In the example above, you may decide that you will open and “approve” bills, while Tony writes the checks. You then sign those checks and Tony mails them out.
  • Compliance. Yes, even as a small business, being in compliance with all of the rules and regulations put out by the IRS and state authorities will prevent you from having to pay penalties and interest. These agencies don’t care how big you are; if you owe it, they will get it. If you don’t have appropriate documentation to argue with their assessment, there won’t be much you or your advisors can do.

It is very possible to go overboard with implementing internal controls. Specifically in the case of non-profit organizations, many times insurance companies or stakeholders require a certain level of transparency/internal controls. However, it’s important to ask yourself if you’re over-complicating a process or procedure in the name of transparency. Sometimes this cannot be helped, but it’s always a good idea to ask those who require controls such as these for explanations so you are able to implement appropriate controls that don’t overburden your company’s system.

Dynamic Bookkeeping loves to work with non-profits and other small business who wish to establish efficient workflows and internal controls. Contact us for more information!