At Supporting Strategies, we stress to small-business owners the importance of acquiring a basic understanding of key financial statements. From balance sheets to cash flow statements, we cover just about every financial report a business might need.
For the most part, healthcare practices are no different from any other type of business. A healthcare practitioner needs to understand, say, a profit and loss statement. However, one financial report that all practitioners must be familiar with is the accounts receivable aging report.
Why the Healthcare Industry Has Different Priorities
Although governed by the same accounting principles as any other business, healthcare practices face unique challenges. Government regulation, for one, including compliance with the Health Insurance Portability and Accountability Act (HIPAA). If you operate a healthcare practice, it's critical not only that you understand HIPAA laws, but that your bookkeepers and/or accountants do as well. (Here's one example of why this is so important.)
Suffice to say that if you want to avoid violating privacy laws, and the financial penalties that can result, you must carefully monitor the information you enter into the bookkeeping system.