Your practice is responsible for the health and well-being of your community, but who is responsible for your financial health and well-being? You need one to provide the other, and that means using healthcare-specific accounting software.

Why healthcare-specific?

Because the industry is unlike any other in terms of financial requirements, processes, compliance regulations, and complexity. General accounting systems quiver at the mere thought of healthcare’s books, ledgers, and reporting. They quail at the suggestion of such great demand.

So, dedicated healthcare accounting software it is. Now, what package should you choose?

The one that best meets your needs, of course. 

How can you determine your needs? Well, a company with specialists in healthcare accounting can help you with that. However, you can be proactive and look at some of the packages available.

What are you looking for?

The Best Benefits Built Into Healthcare Accounting Systems

It should come as no surprise that industry-specific accounting software provides benefits you won’t find in general accounting software, no matter how good it is. Let’s look at the top five.

1) Integration

Integration is the bee’s knees. It’s the cat’s whiskers. It’s the best, basically.

Integrated medical and billing systems should be designed for seamless workflow and accurate data transfer. You save tons of time because you don’t have to manually add data to several systems. Enter it once and off it goes to whichever books, ledgers, or accounts that need it. 

Integration also standardizes things like medical and billing systems so that stakeholders have access to the same data based on the same data sources. This makes reports that much easier to understand.

2) Compliance

Your practice either lives by compliance or dies by non-compliance. We’re pretty sure you want the former and not the latter. Otherwise, why would you be here?

US-based healthcare organizations need to comply with the following:

  • Generally Accepted Accounting Principles (GAAP) 
  • Health Insurance Portability and Accountability (HIPAA) 
  • Affordable Care Act (ACA) 
  • Centers for Medicare & Medicaid Services (CMS).
  • Internal Revenue Service Guidelines: IRS healthcare-related tax laws

Many software packages have compliance monitoring and management built into the systems, keeping an eye on updates and changes and adjusting accordingly.

That’s a cool superpower; you have to admit.

3) Security

Data security is of paramount importance. Failure to secure private patient and sensitive financial data is catastrophic. This isn’t melodramatic exaggeration. Data breaches result in severe penalties. Financial penalties can be so severe that you have to close shop permanently.

Even if financial penalties don’t sink you, the damage to your reputation could be irreparable and you’ll have to lock up anyway. Avoid disaster (still no exaggeration) with security features that include:

  • Multi-factor authentication: Two or more verification factors, for example, a password followed by a one-time pin sent to your email or phone. A third factor could be biometric, typically your fingerprint. 
  • Role-based access: Users only have access to information pertinent to their job, for example, payroll.
  • Backups: Data is backed up to secure cloud-based facilities to prevent total loss should a breach occur.

4) Multi-Entity Capabilities

Many healthcare facilities provide multiple services or include multiple legal entities. For instance, an outpatient surgery center might have a small coffee shop where friends and family can wait for procedures to be completed. The shop might belong to the center, but it has its own set of accounts. 

Or, you might have several mental health care centers located within your state. Each one has separate books, but you must also be able to include them in your big picture financials. This requires a centralized platform or framework that brings together entity-specific data and uses automation to categorize and populate ledgers, recons, and other financial accounting systems.

This has several benefits:

  • Eliminates manual data entry and processes, removing human error and improving accuracy.
  • Tracks department-specific data like revenue and costs so you can develop a strategy for that department.
  • Integrates department-specific data to support big-picture decisions, like eliminating poorly performing revenue streams (like a whole department) or restructuring resource allocation.

5) Scalability

Every single business entity, regardless of industry, wants to expand. Sometimes that means increasing patient capacity at a single location. Other times it means expanding into neighboring states (and later, the world!).

It all starts with an accounting system that scales with your organization, i.e., supports your organization’s growth. Some cloud-based accounting providers use a modular system, which means you purchase modules when you need them. Basically, you can expand a module or two at a time. This allows you to grow without overwhelming your staff or making big changes to operating processes.

A Quick Summary

Keep triage for your patients, don’t let it sneak into your accounting systems. Instead, choose healthcare-specific accounting solutions that manage every aspect of financial recordkeeping and reporting. Granular capabilities pinpoint priority risks (financial triage) and successes, and suggest solutions that mitigate one and optimize the other. 

Of course, outstanding accounting software isn’t worth a hill of beans if you can’t access (or understand) all its features and functions. For that, you need a software provider who offers implementation and long-term support services. Someone who works in partnership with you to provide personalized services.