Deliver Invoices Electronically
not handle billing, collection and application of
It is simpler to track down an appropriate email
contact than it is finding the right mailing
address. Also, you can guarantee that your
invoice reached the right person and isn't
languishing on a desk somewhere, waiting to be
delivered. It's also easier to follow up with a
second invoice via email (or fax) than it is to
send another invoice via mail hoping someone
gets it.
Delegate Invoicing Responsibilities
Invoicing is best done by the people responsible
for the client. They work with the client
regularly, so they understand their billing
procedure and who is responsible for approving
payment. This will also cut down on any billing
errors or other issues that could delay the
invoice being paid on time.
Have a Process for Timely Ap proval
Invoices should be approved and sent out
promptly. To cut down on wait times, have a
process in place to get invoices approved
quickly. Institute a system that requires invoices
be approved within 24 - 48 hours. If the
approval doesn't happen in the necessary time
frame, escalate the issue to a higher-level
manager.
Billing errors can be minimized and/or
prevented by applying the audit principle of
Segregation of Duties. Segregation of Duties,
also known as separation of duties, is designed
to minimize errors and fraud.
Businesses should maintain a separate and
distinct department for billing and collection.
The collection department would be in a
position to review any billing for irregularity and
repair any inconsistencies or mistakes with the
assistance of billing.
Ideally the star employee that does it all should
cash receipts. Any errors or omissions which
have a direct impact on the financial success of
your company may be unrecognized. Still,
because of an increase in costs for additional
personnel, strict segregation of duties may not
be possible for the small business owner. If
strict separation of duties is not possible, there
must be someone monitoring the employee(s)
for fraud or errors in billing, collections of
accounts receivable, recording of receipts, and
deposits of money.
Duplicate or Wrongful Billing
Just like it sounds, duplicate billing happens
when a provider bills for the same procedure,
test, or treatment multiple times. A fraud
investigation can ensue if a provider
continuously submits duplicate bills and is
considered an abusive biller.
Coding Without Appropriate Medical
Documentation
Including the appropriate documentation along
with coding is essential for receiving accurate
and prompt reimbursement. Official office
medical forms, letterheads, and/or invoices
should include appropriate authoritative
signatures if necessary.
Failure to Enforce Internal Controls
Internal Controls refer to a process designed to
discourage fraud, safeguard company
resources, and ensure compliance with laws
and regulations. Separating duties is an
important and effective way to make sure that
money is not lost due to a front desk error or an
administrative mistake. Employees who
understand that each step of the process is
monitored and double-checked are more likely
to take steps to ensure accuracy throughout the
billing process.
https://www.corcentric.com/blog/managing-
risk-in-credit-collection-2/
https://www.acgov.org/auditor/standards/
AppendixB-InternalControlQuestionnaires.pdf
https://www.utoledo.edu/offices/
internalaudit/pdfs/10-
8processaccountsreceivablecreditandcollection
s.pdf
Accounts Receivable Audit Risks
 That receivables do not exist
 That recorded receivable balances are
inaccurate
 That it may not be possible to collect
accounts receivable
 That the derivation of the allowance for
doubtful accounts may not properly
reflect bad debt experience
 That sales transactions were not
processed in the correct periods
 That revenue was incorrectly
recognized
Trace receivable report to general ledger. The
auditors will ask for a period-end accounts
receivable aging report, from which they trace
the grand total to the amount in the accounts
receivable account in the general ledger.
Calculate the receivable report total. The
auditors will add up the invoices on the
accounts receivable aging report to verify that
the total they traced to the general ledger is
correct.
Investigate reconciling items. If you have
journal entries in the accounts receivable
account in the general ledger, the auditors will
likely wan to review the justification for the
larger amounts. This means that these journal
entries should be fully documented.
Test invoices listed in receivable report. The
auditors will select some invoices from the
accounts receivable aging report and compare
them to supporting documentation to see if
they were billed in the correct amounts, to the
correct customers, and on the correct dates.
Match invoices to shipping log. The auditors
will match invoice dates to the shipment dates
for those items in the shipping log, to see if
sales are being recorded in the correct
accounting period. This can include an
examination of invoices issued after the period
being audited, to see if they should have been
included in a prior period.
Confirm accounts receivable. A major auditor
activity is to contact your customers directly
and ask them to confirm the amounts of unpaid
accounts receivable as of the end of the
reporting period they are auditing. This is
primarily for larger account balances, but may
include a few random customers having smaller
outstanding invoices.
Review cash receipts. If the auditors are unable
to confirm accounts receivable, their backup
auditing technique is to verify that customers
have paid the invoices, for which they will want
to review check copies and trace them through
your bank account.
Assess the allowance for doubtful accounts.
The auditors will review the process that you
follow to derive an allowance for doubtful
accounts. This will include a consistency
comparison with the method used in the last
year, and a determination of whether the
method is appropriate for your business
environment.
Assess bad debt write-offs. The auditors will
compare the proportion of the bad debt
expense to sales for this year in comparison to
prior years, to see if the current expense
appears reasonable.

Review credit memos. The auditors will review

a selection of the credit memos issued during
the audit period to see if they were properly
authorized, whether they were issued in the
correct period, and whether the circumstances
of their issuance may indicate other problems.
They may also review credit memos issued after
the period being audited, to see if they relate to
transactions from within the audit period.

Related party receivables. If there are any

related party receivables, the auditors may
review them for collectability, as well as
whether they should instead be recorded as
wages or dividends, and whether they were
properly authorized.