For administrators and facility leadership not familiar with the term, an accounts payable ledger, or accounts payable subsidiary ledger, is a financial document used by businesses to track and record all of their credit transactions. All credit information concerning lenders, external suppliers, and investors, can be found in an accounts payable ledger. Long term care facilities can track their accounts payable ledger within their general ledger software.
The primary function that an accounts payable ledger serves for long term care facilities is to accurately record and track debt that they owe to creditors, external suppliers, and vendors. The accounts payable ledger can be viewed in the general ledger software of a long term care EHR.
The main difference between the accounts payable ledger and the general ledger is that an accounts payable ledger only tracks debts and liabilities, while the general ledger tracks all income and expenses.
General ledger software allows long term care administrators to:
- Keep track of bank account details and conduct account inquiries
- Assess per-patient-day (PPD) statistics
- Create and track facility budgets
- Conduct month-end processing by automatically importing all financial transactions from other applications used in the long term care facility
- Generate reports such as income statements (Budget Variance, Per-Patient Day), ancillary statistical reports and labor reports (Per-Patient- Day Current and YTD, Month-to-Month Comparison of PPD Hours)
Accounts payable ledger software, meanwhile, should be able to:
- Support centralized processing of multiple facilities and inter-company accounting
- Offer online validation of general ledger account distribution
- Handle multiple cash accounts
- Import electronic invoices
- Process discounts and due dates per terms set up in vendor profile
- Provide inquiry and reporting for projected cash requirements
Here are some simple steps administrators and staff can take when using an accounts payable ledger:
- List the date of the transaction
- Include the invoice number and payment amount for every transaction
- Add the vendor or creditor name
- Add notes about the transaction that cover anything that may be of relevance
- Schedule the dates when payments are expected to be made
8 Tips For Choosing a General Ledger Accounting Software
- Choose software with all needed features: An administrator should consult with the accounting/financial department to understand what capabilities are expected from the software. Features that most long term care facilities would need include reporting features, a dashboard with summaries, accounts payable, and accounts receivable
- Choose software that is scalable: Scalability is important, as the number of residents a facility holds changes over time. Administrators and accounting staff should look for nursing computer software that can adapt to their changing needs and “grow” with them.
- Multi-entity capability: For large healthcare organizations with multiple locations, the ability to separate and manage the financial records of different sites is critical for their business. Hence, a business director should look for software that enables the accounting department to review and manage all the financial data of their sites, separately.
- Ease of integration: In recent times, integration has become a rising issue in long term care. Administrators should look for an accounts payable ledger that can easily send and receive information from other general ledger accounting software and can integrate with their long term care EHR.
- Ease of use: If the software cannot be effectively used, it is pointless and a waste of money. Administrators in long term care facilities should look for software that has a user-friendly interface and consult with the financial department on its ease of use. One should also look for software providers that offer free training modules with their software, as this makes it easier for all staff to understand the software and all its features.
- Cloud based software: More and more companies are moving to cloud-based software, and this move includes the government. Cloud software offers a lot of advantages such as remote access to data, data security and low cost of data storage.
- Consider your budget: Of course, an administrator should never forget to consider how much they are willing to spend for their nursing home software. Some software systems are sold as one-off purchases with the disadvantage of no customer support. Most long term care software systems, though, follow a subscription model. Although the software can be expensive, the best long term care software vendors offer some of the best customer support out there.
- Test the software: Booking a demo for a general ledger accounting software is a great way for long term care facilities to test all of the software features and determine if the software is a good fit for them.
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How to Increase Accounts Payable in Long Term Care Facilities
An accounts payable ledger is invaluable to long term care facilities looking to track debts and other liabilities. When looking to select the best general ledger software, administrators may want to see an accounts payable ledger example that can seamlessly handle invoices and view relevant dates. That is why it is worth booking a software demo in order to test all the features of the nursing home software.
For administrators interested in learning how to increase accounts payable, the following tips may prove to be helpful:
- Avoid “holding onto” receivables: Skilled nursing facilities (SNFs) have a tendency to leave a resident’s receivable balance on the books long after the point of reasonable collection. Administrators and finance staff should take the necessary steps to avoid this.
- Have enough finance staff: Staffing levels differ from facility to facility, depending on facility size. A nursing home administrator should ensure the finance department has enough staff, as being short handed can result in burnouts.
- Capture all resident information: During admission to a nursing home, administrators need to ensure all resident information is captured in the long term care EHR. By using this long term care software, nursing homes and SNFs can accurately file reimbursement claims under PDPM for all services they provide to their residents.
Why Use an Accounts Payable Ledger in Long Term Care
When selecting a long term care software system, it is important to choose one with general ledger accounting software and an accounts payable ledger. An accounts payable ledger offers automated reporting tools, supports centralized financial processing for multiple facilities, allows for the handling of multiple cash accounts, and enables the import and export of data across multiple software. Of course, nursing home leadership should first try a demo before negotiating the contract to ensure they get the best software at the best value.