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  1. Accounts Payable (A/P): the total amounts owed by the practice to suppliers and other service providers for regular business operating expenses, such as medical office supplies and equipment, office rental space, utilities (gas and electric, water, telephone and/or Internet services), and office staff salaries

  2. Accounts Receivable (A/R): all the outstanding accounts (amounts due to the office); a reporting system to see who has not paid on their account

  3. Credit: a payment subtracted from existing balance

  4. Debit: to deduct, to charge; a charge added to existing balance.

  5. Day Sheet: form used for recording all daily financial transactions of charges made and payments received; also called a daily journal. All patient charges and receipts are recorded on the day sheet each day (primarily with manual bookkeeping systems

  6. Revenue Cycle: all aspects and transactions and include (but not limited to) procedure/service coding/charge capture, claim submission, billing, collections, payments, and more (Figure 26–1). Every aspect of the revenue cycle impacts billing and accounting

  7. Remittance Advice (AR): document sent (electronic or paper) from the insurance company to the practice with the approved amount and payment for services provided to the patient similar to the explanation of benefits (EOB) the patient receives from the insurance company

  8. Posting: the transfer of information from one record to another. This might be an automated process, depending on the electronic system in place.

  9. Medical Record Number (MRN):

  10. Date of Service (DOS): the calendar date a service begins or is provided

  11. Nonsufficient Funds (NSF): meaning the patient does not have enough money in the bank account to cover the amount of the check

  12. Bankruptcy: the state of being bankrupt, being legally declared unable to pay debts; a petition to a court by an individual who is stating that they cannot pay any debt incurred.

  13. Aging of Accounts: dividing accounts into categories according to the amount of time since the first billing date; way to identify accounts according to the length of time the accounts have been delinquent.

  14. Write-offs: a reduction in the value of an asset or earnings by the amount of an expense or loss, usually deemed uncollectible by any business; charges that are deemed uncollectible by any business.

  15. Cost-Benefit Analysis: an analysis that allows for program evaluation by demonstrating whether the benefits received will outweigh its costs

  16. Assets: anything owned that has exchange value; all the entries on a balance sheet that show the property or resources of a person or business; the money and items of value in a business

  17. Managerial Accounting: the study and analysis of financial data as it applies to operational issues within a company; also known as cost accounting

  18. Invoice: a document that includes itemization of goods and purchases or services provided together with the charges and terms of the agreement

  19. Income Statement: A statement that demonstrates the profit and expenses for a given month and also includes year-to-date information for a given year

  20. Petty Cash: a small amount of cash available for small business expenses used for postage stamps, inexpensive office supplies, and small charitable donations, usually maintained in a locked container

  21. Adjustments: credit entry made on an account to decrease a balance owed to the medical office; may be due to insurance, professional discounts, write-offs, or to correct bookkeeping errors.

  22. Ledger: a record of all charges or services rendered, any payments made by the patient or the insurance carrier, and any adjustments, included with the specific dates of these entries

  23. Visit Capture: sometimes called charge entry; entering of the diagnosis codes and procedure codes for the patient encounter and information such as date of service (DOS), units of service, CPT modifiers, authorizations number, provider details, billed amount etc.

  24. Revenue Cycle Management (RCM): managing the financial side of the medical business; more explicitly, RCM is “the administration of financial transactions that result from the medical encountersbetween a patient and a provider, facility, and/or supplier (HBMA).

  25. Debit Balance occurs when the amount paid is less than the total due