Performing a month-end close in SUD treatment can be a difficult task. Many facilities are not even attempting a month-end close; however, it is a very valuable effort to complete.
What is a month-end close and why perform one?
A month-end close produces reports that represent the financial health of a company at a point-in-time. Most often, companies use this process to inform management but also to work with financial institutions or investors. Providing month-end close data can help facilities secure funding for future growth.
Why is a month-end close challenging for SUD treatment?
Simply put, any medical billing is complicated, and SUD treatment billing adds an extra level of complexity. It’s often difficult to obtain all the transactions that occur in a period because delays in completing the necessary medical documentation can delay the submission of claims, even though the service was in that period. Ideally, reporting should show the date of service rather than the entry date. When you report on the date of service, it’s a more accurate picture of service production in a given period.
Another reason SUD treatment providers find month-end closing a challenge is because of software limitations. Most platforms built for medical operation management, such as EMRs and RCMs, were not built with accounting in mind. This often requires accounting staff to leverage another third-party tool. Because of this, Sunwave will be launching a Financials Module as part of our comprehensive behavioral health treatment platform.
How does the month-end close process work?
A month-end close process starts with the general ledger, where team members record the credits and debits of transactions. Essentially, you’ll start with a beginning accounts receivable balance, then add the total billing charges for the period, subtract the total payments received, subtract the total adjustments, and subtract and refunds paid to get your ending accounts receivable. Finally, you’ll check to make sure your accounts are balanced.
Having accounting software that’s connected to your billing system, like the Sunwave RCM module, can be a considerable asset to completing the month-end close. That’s why the Sunwave team is hard at work on the final stages of our new SUD treatment Financials Module. Stay tuned because the official release is right around the corner.