Long-term care facilities provide various services, including clinical healthcare, rehabilitation, and daily routine assistance (ADLs). That means managing the finances and billing in a long-term care facility can be complex and challenging.
Here we will explore accounting terms related to the industry, focusing on what is posting in accounting, footing in accounting, and the benefits of using long-term care software to manage the financial accounts in long-term care facilities. It will become clear why many long-term care facilities invest in financial accounting software to maintain and streamline their financial accounts.
What is posting in accounting in long-term care?
Posting in accounting refers to transferring the total balances from a facility’s sub-ledger and the general journal to the general ledger. Rather than transferring each transaction individually—such as transactions from accounts receivable, accounts payable, or fixed asset transactions—posting only moves the total balance of larger-volume transactions into the general ledger, an essential step in creating financial statements for a facility.
Posting adjusts sub-ledger and general journal entries accordingly so their contents are posted in the general ledger. Depending on the needs of the facility’s financial manager, posting may occur daily or monthly. Meticulous posting is essential to ensuring that all financial transactions are accurately recorded, classified, and summarized, giving the facility accurate insight into its financial performance to make data-driven decisions.
In long-term care facilities, managing financial accounts is typically the responsibility of the accounting or finance department. These professionals use long-term care accounting software to post transactions, analyze financial data, generate financial reports, and enter invoices, providing valuable insight into the facility’s financial health.
What Is Footing in Accounting?
Footing in accounting determines the final balances in a financial statement, calculated after all debit and credit transactions. First, the footing process adds all the numbers, such as the facility’s debits or credits, in a single column to create a final sum at the bottom (or foot). Afterward, the two values are subtracted to calculate the account balance.
The facility’s financial manager traditionally performed this function manually using a calculator. However, the process can be automated using nursing computer software with built-in spreadsheet programs to ensure the amounts on the statement are accurate.
For example, in the long-term care facility’s general ledger, an expenses column may be incurred when providing patient care, such as staff salaries, medical supplies, and medication expenses. The financial accounting software will automatically calculate the footing in the expenses column to ensure the total costs are accurate and adequately reflected in the financial statements.
Below, we will discuss the different types of footing in accounting that financial managers should automate to ensure the data is correct and, consequently, any reports generated from the raw data are accurate.
Footing techniques in accounting
There are three types of footing in accounting:
- Cross-Footing: Cross-footing is used when working with tables with columns and rows. It involves adding up all the column foots and comparing the result with the sum of all the rows in the table. These values must match to ensure the accuracy of calculations when performing footing. Even with the added convenience of using nursing home software, the financial manager should double-check these figures.
- Pencil Footing: In the past, financial managers in long-term care facilities manually recorded financial information using large accounting books with tabular pages, such as ledgers, balance sheets, and income statements. This traditional practice gave rise to the standard method, pencil footing, which entails adding the figures in a column and writing the total in small pencil figures at the bottom. Meanwhile, individual entries were recorded in ink. Pencil footings were used to transfer the figures to another page or to the general ledger, displaying the organization’s overall debit and credit balances.
- Balancing and Footing: In the context of double-entry bookkeeping within a long-term care facility, every account that pertains to cash, accounts payable, wages payable, or any other type has a debit and credit side. A corresponding entry on the other side counterbalances an entry on one side. A balanced footing is crucial for the financial manager. When footing the columns on one side, the sum must match the foot on the other side. If there is no match, it signifies that the columns “don’t foot,” indicating either an error in the calculations or one or more erroneous entries.
Due to the wide range of figures and accounting calculations, many long-term care facilities now opt to manage their footing and better understand what is posting in accounting with a reliable nursing home software program. This ensures the processes are streamlined to create accurate financial statements while allowing the facility to concentrate more on providing excellent care to its residents.
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6 Steps to Posting Accounting
Now that we know more about posting accounting, we will look at how a long-term care facility uses financial software programs to understand what is posting in accounting and manage the accounting cycle process, following these six steps:
- Use transactions to create sub-ledgers and general ledgers: Record the appropriate transactions and accounts in the respective ledgers.
- Create the general ledger: Transfer all sub-ledgers and general journal balances into the general ledger.
- Enter the appropriate information in the general ledger: Include the account name, the amount carried forward from the sub-ledger and general journal, and other relevant entry details.
- Enter the debit and credit balances in the general ledger: All debit balances (increases the asset) and credit balances (increases the liability in the accounts) from the sub-ledger and general journal must be entered into the general ledger.
- Maintain the general ledger account separately for each period: Ensure each account is maintained separately. Failure to do so can result in double balancing or inaccurate accounts, leading to financial instability and ineffective decision-making.
- Correct inaccuracies: The final step is to double-check that all balances are correct. This is where long-term care software programs come in handy because they can cross-verify balances systematically, identify errors, and correct inaccuracies to maintain proper financial records.
Whether a financial manager uses the nursing home software for posting or footing in accounting, facilities that use long-term care software programs can save time by automating the accounting process and reducing the likelihood of errors.
What Is Posting in Accounting and What Are the Benefits of Using Financial Accounting Software to Manage It?
As we conclude on the question of what is posting in accounting, we will discuss several significant benefits of using long-term care financial software and how it can help with posting:
- Improved accuracy: Long-term care software automates the posting process, significantly reducing errors. The software can also perform automatic checks and balances to ensure accurate figures in the general ledger. This allows automatic import transactions from other applications before finalizing and printing reports.
- Time-saving: Automating posting through long-term care software can save considerable time compared to manual posting. This frees up staff time for other tasks and allows for more efficient financial reporting.
- Greater visibility: Long-term care software provides a comprehensive view of financial transactions, from the sub-ledgers to the general ledger. This makes tracking financial activity, identifying errors, and reconciling accounts easier.
- Compliance: Using software designed for long-term care facilities ensures compliance with long-term care-specific accounting regulations and best practices. This can help avoid penalties and improve financial reporting.
- Financial reporting: Long-term care software can generate various financial reports, including balance sheets, income statements, and cash flow statements. These reports provide insight into the facility’s financial health, allowing administrators to make informed decisions.
In addition to the benefits of posting accounting, long-term care software offers many other advantages for facilities. For example, it can help with billing and accounts receivable management, payroll processing, and budgeting. Long-term care software can also improve the financial management of facilities operating on tight budgets and those facing regulatory pressures.
Overall, long-term care financial accounting software provides facilities with a more efficient and accurate way to manage their finances, including the posting accounting process. By automating posting and offering a range of features designed for long-term care facilities, the software helps improve financial reporting, compliance, and decision-making.
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