Accounting plays an imperative role in any medical office, sometimes serving as the supporting force allowing the organization to work at its fullest potential in an organized manner. Every type of organization needs an accounting department because it is impossible to continue working without one. While it may seem like a single part of a business, it is actually one of the main parts of any business.
Generally accepted accounting principles (GAAP)
These are a set of accounting principles, standards, and accounting procedures used in the compilation of financial statements.
They are the accepted methods of recording and presenting financial transactions and necessary data. Every business owner needs to be familiar with these standards.
Compliance with these principles is required by law. In the case of non-compliance, an organization may be fined by the United States Security and Exchange Commission. Other than following these general principles, each organization may have slightly different procedures regarding the nature of its operations. As an entrepreneur, you need to know these things to avoid non-compliance.
Elements of financial management and accounting
There are four key elements in Accounting and Financial Management. These elements are found below.
Planning
Planning enables an organization to mark guidelines and goals to make sure that the office is successful in the future. Goals also allow managers and decision-makers to track progress.
Controlling
Controlling gives an organization the ability to make sure that all departments that are a part of the organization are adhering to the guidelines as well as contributing their part towards the achievement of goals. It also enables an organization to find problems that come up and allows them to fix them properly.
Directing and organization
The Directing and Organization element is one of the more important elements of financial management. It ensures efficiency, allowing an office to work at its fullest potential. Problems may arise daily, and this element helps to fix these problems by giving an organization the chance to work through financial management.
Decision making
Decision Making utilizes the other three elements (i.e., controlling, planning, directing, and organizing) by analyzing all the gathered information and coming up with final decisions to improve and optimize financial management in a business.
Ethics and accounting
Accountants are bound to the highest standards of ethics compared to any other profession. After all, the information that is received via financial statements and bookkeeping is used in making extremely important decisions related to a business’s financial standings. If an organization does not have an accounts department, such information would not be available to the business decision-makers.
Concerns regarding ethical standards, along with corporate and social responsibility, have increased in their importance. These days, both private and government organizations have objectives to mark and enact proper and stringent ethical standards. Organizations are also subject to review to ensure the enforcement of these guidelines, policies, standards, and goals.
Accounting in medical offices
An accounting department working in/for a medical office holds immense importance for its role in the success (or failure) of the business.
First, it should follow the GAAP guidelines. This will ensure that the organization is not penalized by law enforcement in any manner. Mistakes made by the accounting department could result in legal procedures that would harm the reputation of the entire medical office.
At the same time, an efficient accounts department can provide information to decision-makers who can then streamline operating procedures to ensure the financial success of the medical office. Although one of the most important tasks of medical offices is to provide medical services, they cannot do so without an accounting department that is effective and successful.
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