I just noticed that my accounts receivable, or at least the number I get from my PM software is much higher than what my accountant reports on a PnL statement.
A couple of comments:
1. By “accounts receivable”, are you talking about the balance at any given point in time OR the collections figure from an A/R report?
2. It sounds like you’re describing the “collections” that are on your P&L report and if you’ve asked your accountant to “report” on a cash basis, then it’s being reported correctly.
3. I hope you’re not trying to compare an A/R balance with collections.
4. If you are comparing PM collections with accounting record collections there could be several valid reasons why the numbers don’t match: do you use care credit? Do you deposit cash payments (don’t have to answer that here ;-))? Are your PM collections net of patient refunds? Are the P&L collections net of refunds?
Does your PM collection number include any other “credits” not actually collected?
Shouldn’t he be looking at the “actual” sales from the PM software (Dentrix in this case)?
Only if you’re paying him to look at them. If you’re only paying him to produce cash basis P&L’s for income tax prep purposes there’s no need for him to see your PM reports.
And then there’s the accounts that are paying in installments, so there’s a lot of sales earned but not collected that he is not accounting for.
Now it sounds like you’re talking about PM production, NOT collections.
Also what happens when we have to write off a certain amount , either because the patient or the insurance company didn’t pay, how is that recorded for accounting purposes? Should it be?
In the PM software yes. For tax or cash-basis P&L purposes, no.
Lastly, have you asked your accountant these questions and ask him to help you understand?
This first appeared on Dentaltown.