Chapter 11: Finance

What is the Fair Debt Collection Practices Act, and why was it established?

-was established to protect the consumer and set guidelines for credit collectors to abide by. -Guidelines include: only speaking with the client that owes money, not calling before or after specified hours, and not placing debt collection notices on the outside of statement envelopes.

If a practice reports services when they are invoiced, they are reporting by which standard?

Accrual Basis

Third-party payment plans include:

CareCredit, Veterinary Pet Insurance, and PaymentBanc

Which of the following is mandated by the Fair Debit Collection Act?

Collection calls can only be made between 8 a.m. and 9 p.m.

Define the Red Flags Rule, and discuss why it should be implemented by the veterinary practice.

established by the Federal Trade Commission to try and decrease fraud, embezzlement, and identify theft in businesses. It is up to every practice to protect the clients and team members.

Withdrawing employee accounts receivable from the employee paycheck is an acceptable form of payment.

no

The purpose of Wellness Plans is to:

promote preventative care

Wellness plans should be developed by:

species and age group

Holding checks for clients is recommended when they cannot pay for services the same day.

true

Staff payroll is considered a ______ expense for benchmarking purposes.

variable

Define some areas that could cause a cash flow crunch.

could be caused by improper inventory management, fraud or embezzlement, excessive payroll, or higher than profit distributions paid to the owner(s).

Define benchmarking, and describe the difference between internal and external benchmarks

*Benchmarking is the process of comparing a practice to others on a local, state, region, or national level* -Internal benchmarks: look at the practice's historical figure -external benchmarks: are the average numbers or percentages across the industry.

What is the difference between a CPA and a bookkeeper

-CPA: has a degree in accounting and has sat for numerous exams. CPAs must also attend continuing education each year to maintain their professional status. -bookkeeper: generally learns by trade.

How can a manager increase the value of a hospital?

-ensuring medical records are complete, recommendations are made to clients, and that clients accept the recommendations being made. -Increased client compliance and retention drive value, along with low turnover of team members. -Building maintenance, modern equipment, and good financial records will also help.

Accounts receivable should not exceed:

1.5% of gross revenue

What is a held check?

A check that is given to a practice, with the date of acceptance written on the check, and asked to be deposited on a later date.

Pet health insurance:

Improves patient care and Increases patient examinations

What is a variable expense? Give some examples.

an expense that changes with the volume of clients and business. Examples include medications, supplies, and pet foods.

What is a fixed cost? Give some examples

an expense that does not change regardless of the volume of business. Examples include rent, electricity, and property taxes