Physician-owned medical practices play a vital role in their communities—not only by delivering care, but also by creating jobs. At the same time, they face many of the same challenges as any small business. Owners and staff often wear multiple hats to keep things running smoothly. But when operations feel stable, it’s easy to overlook risks. One of the most important areas to pay attention to is Segregation of Duties

Money In, Money Out 

Medical practices experience significant cash flow – patients pay co-pays and fees by cash, check, or credit card, while insurance companies and government payers deposit funds electronically. Explanation of Benefits (EOBs) and transaction records can pile up quickly.  Payables can also pile up fast – managing the cash inflows and outflows well is a daily task. 

Who Do You Trust? 

Managing money requires both trust and oversight. Common financial tasks in a practice include: 

Collecting co-pays and other patient payments 

Posting payments in the practice management system 

Credit card batching, reconciliation, and posting 

Daily deposit reconciliation 

Secure transfer of funds to the bank 

Bookkeeping and accurate recordkeeping 

Bank and credit card account reconciliations 

Maintaining check stock logs 

Petty cash management 

Payroll oversight, often the largest expense in a practice 

Why Segregation Matters 

It’s tempting to assign most of these responsibilities to one trusted employee. However, best practice is to separate them as much as possible. For example: 

The person collecting money at the front desk should not also be depositing it at the bank. 

The individual making deposits should not also be recording them in the books. 

Perfect segregation isn’t always realistic in a physician-owned practice. Still, it’s essential to determine which duties the owner should oversee, which can be divided among staff, and which may be best outsourced to a third party. 

Next Steps 

Want to review your practice’s specific processes with an experienced management or accounting professional? Contact DoctorsManagement today to schedule a consultation. 

This blog post was created with assistance from ChatGPT. Initial draft by Andrew Ashton, CPA; edited with AI feedback. 

 

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