Best Practice Guidelines: Accounting Management


3. Debtors (Sales)

What is a debtor?

A debtor is a person that owes money to the practice for services rendered and for stock used or issued by the practice to a patient. Debtors are also known as "accounts receivable". Debtors increase your Assets and are therefor a Balance sheet item and will only reflect on your balance sheet, but the income that was generated through the debtors will reflect on your Income statement as an income. Everything that is written off on a debtor, eg, discount allowed, settlement discount, bad debts are written off and small amounts are written off will reflect on your income statement as an expense.

At first, a Debtor needs to be created on the system. To create a Debtor, the following information is needed:

  • Name and surname of the Main member
  • The ID of the main member
  • Gender of the main member
  • Postal as well as the street address of the main member
  • Contact details of the main member
  • e-mail address of the main member if available
Medical aid details if it is not a private patient.
  • Dependant code
  • Whether it is a medical aid patient, insurance or WCA/IOD patient.
  • Next of kin information eg, Name, surname, address, contact number as well as e-mail address and relationship to the main member.

If the main member is not the patient the following information is needed:

  • Name and surname of patient
  • ID of patient
  • Address
  • Contact details of the patient
  • Dependant code of the patient
  • Gender of the patient
The main member is in most cases also the Guarantor of the debtor and the information of the main member can be copied into the Guarantor information field by pressing * in the Surname field of the Guarantor field.

The Guarantor is someone other than the main member of the account that is responsible for the account.


Patient validation can be done at the time of admission or seeing the patient ensure the patient is a valid member of the medical aid via the GoodX switch on the following screens:

  • Admittance screen
  • Debtor input screen
  • Patient Input screen

The origin of income generated from a debtors transaction is based on the billing that was done on the specific debtor's account (DEB). eg Consultation fee. The impact on the ledger when billing is done as mentioned is as follows:

Debtor A

R 600.00


Professional fees Income


R 526.32


Vat control account


R 73.86



At the same time as the above-mentioned transactions take place in the ledger, the DEBTORS CONTROL ACCOUNT also gets debited with the amount of R600.00.

What is a debtors control account?

The balance of the debtor's control account must equal the total of the age analysis, which represents the amounts owed by the individual debtors obtained from the individual balances in the subsidiary ledger accounts for each debtor. This subsidiary ledger is known as the debtors' ledger.

The Age Analysis report is used for showing all the outstanding accounts, Medical and Patient outstanding accounts.

This a list of all the information that you should include in a debtor statement of account:

  • Your company name. 
  • Your company address.
  • Your phone number and email address - you may wish to specify someone that should be contacted with any queries about the statement together with an extension number (if required).
  • State that it is a "Statement of Account".
  • Statement date - the date at which the account items were produced.
  • Customer's name and address.
  • You're and/or your customer's reference numbers. 
  • Your VAT number. (if registered for VAT).
  • An opening balance is a total of all the previous items brought forward, you may prefer to have all items listed (item detail)- referred to as an open item statement or a summarised opening balance from the previous financial period(closing balance). All formats depend on the settings of the system you are using. 
  • Itemisation of each transaction such as invoices, credit notes and payments. In each case, the date, reference number, description and the value should be stated. You may additionally want to itemise VAT for each item, or overall on the statement (if registered for VAT). You may wish to structure the items into a column of debits and a column of credits, with a balance, or running total adjusted after each item.
  • Total value due - the closing balance of the statement. This may include items that are overdue, those that are due now and some that are not yet due.
  • The amount that is overdue - this is to make it very clear the amount of the payment that is now required to bring the customer's account up to date.
  • Customer's payment terms e.g. 30 days. So they can see from the invoice dates which items are overdue. Some companies prefer to state which items are "overdue" and "current". In some cases, a debtor's aged analysis format is used where the items are broken down into various columns according to age e.g. current, 30-60 days, 60-90 days and 90 days+ or some similar format with even more granularity.  
  • Your bank details or payment instructions e.g. bank, account name, account number. 
  • Page numbers e.g. page 1 of 3, like account statements, can often run to several pages if they contain numerous items.
Value-added Tax Invoices.

FULL TAX INVOICE. (Criteria that the invoice must meet where the supply (including VAT) exceeds R5000.00.)

  • Contains the word "Tax Invoice", "Vat Invoice" or "Invoice".
  • Name, address and where the recipient is a vendor, the recipient"s VAT registration number.
  • Serial number and date of issue of the invoice.
  • An accurate description of goods/and or services.
  • Quantity or volume of goods or services supplied.
  • Value of the supply, the amount of tax charged and the consideration of the supply (value and the tax)
NOTE: all seven criteria must be met for the invoice to meet the requirements of a Tax Invoice.


ABRIDGED TAX INVOICE.(Criteria that the invoice must meet where the supply (Including VAT) is>R50.00 and <R5000.00)

  • Contains the words "Tax Invoice", "Vat invoice" or "Invoice"
  • Name, address and VAT registration number of the supplier.
  • Serial number and date of issue of the invoice.
  • An accurate description of goods and/or services.
  • Value of the supply, the amount of tax charged and the consideration of the supply (value and the tax).
NOTE: All five criteria must be met for the invoice to meet the requirements of an abridged Tax Invoice.

 





Files

Billing

Claims

Receipts

ERA

Corrections 

Reports

- Age


Managing your Income from patients or clients

Must indicate between Cash, Card and electronic payments, to make the recon easier and correct.


Every day the following is happening

1. Billing patients

2. Payment - Patient (Cash register) or Medical aid 

Cash-register

1. Cash up every day for every entity

   - End session

   - Print session report Daily or weekly

2. Transfer Cash (KAS1) to the Petty Cash if you use the Patient Cash for the Petty cash (KAS5), Otherwise the cash will be bank into the bank account and the other leg will come from the bank account.

3. Card payment will be recon back to the bank account because the payment is paid into your bank account after the card was swiped.