Just Say NO to QuickBooks Online

Intuit is doing everything they can in their marketing endeavors to push all accounting software users to QuickBooks Online. While installing QuickBooks Desktop 2018, I was amazed at the blatant pop up offering three free months if I converted to the online version.

Let me be clear, I get it. After all, QuickBooks Online looks great. Being able to use a mobile app is appealing and having access while you are sitting on a beach sounds great. Although, if I am on a beach, working on my accounting would be the last thing on my mind.

The colors and graphs look amazing, but, what are they not telling us What are we sacrificing by going online?

If you hang around me long enough, you’ll learn how I really feel about

QuickBooks Online. While many CPAs and consultants do not share my views, if you look from the viewpoint of what is truly best for our clients, most cases, it is not the online version.

There are many valid reasons to not use QuickBooks Online. As I have converted as many Online users back to QuickBooks desktop version, let me explain the problems.

Change your mind? Too bad. QuickBooks Desktop version converts nicely to QuickBooks Online, however, QuickBooks Online does NOT convert cleanly to QuickBooks Desktop. There is no clean backup. I think it’s interesting that Intuit asks why you are doing a backup: as a backup or are you going back to the desktop version? With the increasing degrees of difficulty and required hoops jumped through when converting, it appears they are sabotaging the entire process. In the least, they are not making it easy.

In the past few months, the steps to download have become more refined and easier to follow. However, the data does not download as it appears online. Profit & Loss Reports, as well as Balance Sheet reports, often do not line up when converting to Desktop. This poses a massive problem.

Backups. A recent transition client’s CPA completely revised their QuickBooks Online Chart of Accounts. Incensed, the doctor decided to get off QuickBooks Online and start using the desktop version. An online client for many years, he was frustrated with the consistent errors in his data and felt he had no control.

If you make changes to your online Chart of Accounts, or balances become off for whatever reason, there is no “reset” option in the Online version. With the desktop version, there is a simple restore of your prior backup, which has been done many times with overzealous accountants who truly did not know QuickBooks as well as they should.

This is truly something for you to consider. Are you willing for your accounting data to only be accessible online? To not have a guaranteed copy downloaded?

Really think about it.

Other Names. One of the major missing components from the Online version included in the Desktop Pro version, is the Other Name payee type. The Online version has only three choices: Customer, Vendor, and Employee.

The reason this is significant does not matter to the accountant, who is simply doing your taxes, but it does matter if there is business management oversight.

Customers are patient refunds and employees are paid through payroll, but not everyone else is a Vendor.

A Vendor is someone you do business with through the course of your practice. It is the supply company, the labs, the landlord, the IRS, the professional associations, the utility companies, the plumber, the IT company, etc.

A Vendor is NOT the restaurant, the convenience store, the hotel, the airlines, the grocery store, where you get gas or the pizza delivery. These are all very common transactions in a practice and should be categorized under Other Names. The reason? A great report to review – Expenses by Vendor Summary.

Business management is most effective with separate payee types. Not separating them out convolutes the ability to fully review the report.

Cost. I recommend the QuickBooks Desktop Pro version be upgraded only every three years. In comparing cost, the QuickBooks Desktop Pro version can most of the time be purchased for $199.00 vs. $1380.00 for the Online version (3 months with a 50% discount, then $40 per month.) For me, that’s a no-brainer.

Accessibility. The reason an accountant tells their client they would prefer the business use QuickBooks Online is always for ease of access. There is simply no other reason. Period.

Let’s break that down. QuickBooks Online costs 3x more than the desktop version, for a third of the features. All so the accountant can have uncontrolled access to your data, and most likely only 1-4 times a year.

There are other ways you can give the accountant access to your QuickBooks Desktop version, in a greater controlled environment. Creating and emailing an Accountant’s Copy every month would be sufficient. They can make their changes and then import them into the Desktop version. This also provides a summary of the changes that will be imported for review PRIOR to accepting the changes.

I marvel at how QuickBooks Online has been sold as the only way to access QuickBooks through the internet. There are other options. You can access your computer remotely through GotoMyPC ($23/month), or use an online service such as iNSYNQ, which hosts the full QuickBooks desktop version in the cloud.

Chart of Accounts. The design of your chart of accounts is a vital aspect of understanding your reports. Currently unavailable online is the ability to inactivate any old accounts, vendors, employees, etc. They can be deleted, which is odd, as this removes them from the list, but still allows them to be restored if needed. This is not a smooth process and, I suspect, the reason why it is nearly impossible to download a clean backup copy.

For example, if you delete a Balance Sheet account and it has a balance, QuickBooks Online creates a journal entry for you. Likewise, with a deleted Vendor with a balance. I searched QuickBooks Online help and the alternate answers made me laugh, but it is certainly nothing I would ever recommend.

The order of organization I recommend for the desktop version is by the “weight” (cost) of the practice area, with Doctor Expenses always being last, generally being mostly subjective. The Chart of Accounts Online offers a single version of organization: alphabetical order, parent, and subaccounts.

My clients will start fresh with QuickBooks Desktop 2018 version as of January 2018, and will no longer have any historical data. To this point, I have spent 8 hours determined to give them historical data. They will, however, have a resemblance of this data with all the report detail downloaded from the online version for backup.

I had a previous client call because her IT guy recommended QuickBooks Online. My response to that? They should stay in their lane. Do not allow anyone to talk you into doing anything without doing your homework first. What sounds like a great idea, may not be so grand in the long run.

Just say no to QuickBooks Online.

Want to take control of your QuickBooks? Get Susan's book here.

Collection Agencies 101

By Guest Blogger: Andy Cleveland

Selecting a collection agency is like purchasing a hand piece, a car or a toothbrush: not all are created equal. Depending on the customer and circumstance, factors to consider are cost, risk versus reward, patient relationships, staffing scenario and brand coherence.

Lately, there have been a noticeable amount of social media posts looking for someone to “recommend a good collection agency.”  My goal is to help educate, motivate and empower the dental community to make informed decisions when looking into a collection agency for their practice.

First, it is important to acknowledge that using a collection company is merely treating the symptoms of an inefficient system. Some quick tips to help reduce the need of a collection service are:

1.  Properly pre-estimate the patient’s insurance portion at time of service. Performed internally, or by a third-party entity, it needs to be done properly.

2.  Have third-party financing options for people with a spectrum of credit scores. 

3.  Train and empower your staff to collect at time of service. If patients walk out without paying, you are creating the problem. Setting a cultural expectation to
be paid at check out relieves you from the burden of chasing down after-service payments.  

Inevitably, there will be some outstanding accounts receivable, regardless of practice efficacy. If the amount is outside your comfort zone, it's time to hire a company to help with the collection. 

Without further ado, here are 8 questions to determine the best fit for your practice when hiring a collection agency. Keep in mind, the answers are not necessarily definitive, but are tools to aid in your selection.

1.  In which states are they licensed or bonded?  Knowing this will help determine if their geographical coverage is sufficient. A collection company not authorized to collect in a neighboring can have damaging effects. In this case, going with a nationwide company is usually a safe bet.

2.  Do they have a proven process? Do they give examples of scripted patient communication, or are they  simply  “winging it?” Ultimately, how they communicate with your patient is a direct reflection of your values. So, if they seem vague, it's a red flag, as we're all prone to simple human error. The last thing you want is for your patient to leave negative reviews on your practice should they be treated unfairly by your collection agency.

3.  How is the company compensated?  Are they working strictly on a commission basis? Though initially attractive, there is no promise of performance from either party, which often leads to disappointment. If they have a large client with high volume and large balances, whose accounts are they going to call first? While neither malicious nor fraudulent, it just makes good business sense for them to cater to the high volume client, since dental patient balances are generally smaller.

4.  Technology.  Do they integrate with your software? How do you send them the data? Are they HIPAA compliant? A substantial accounts receivable that requires manual entry into a third party system can not only build up employee resentment from laborious data entry, but also marks the task as low priority. Look for a partner that can seamlessly sync up with your practice management software. If you'd like to see this done, let me know, the demo takes only about 15 minutes.

5.  Do they specialize in the dental field? If they work in other industries, how comprehensively do they understand your business?  I specialize in working with dental practices – it is what I am most passionate and is my core industry. Always be on the lookout for a company tailored to your needs. 

6.  Are the callers located in the U.S. or overseas? Are you willing to allow your patients to be called from someone in another country for cost savings? While cost is important, customer service, public perception and value are equally so. 

7.  Do they report to the credit bureau? Many collection companies insinuate they do, but never follow through. While every financial company reports to the agency when a debt is unpaid, most often dental practices do not, only to hurt the practice in the long run. 

8.  Does the company offer first party billing solutions? Will they work as an extension of your practice like a virtual assistant to your team? If the majority of accounts pay before 90 days, not only are less people being turned over to "collections," they are more likely to stay loyal to the practice, as well. 

If your practice is considering hiring a collection agency and needs further information, please do not hesitate to reach out. I will be happy to answer any questions or assist in any way I can.

About Andy Cleveland

“The Dental Accounts Receivable Ninja” has been in the revenue cycle space for almost 20 years and has served a variety of capacities. He began working with dental practices by motivating difficult patients to pay accounts on everything from hygiene visits to full mouth restorations. Learning the business from the ground up, he developed a proficiency in recovering lost revenues and rose to the top of his field.  Andy realized his skill sets were better utilized working with clients, so he moved to the consulting and service side of the business where he could make a greater impact. Currently, he works with individual and group practices optimizing their patient accounts receivable process to maximize profitability and efficiency, patient retention and frustration reduction.  

Check him out at www.andycleveland.com.

Merchant Services 101: Part 1

Introduction To A (Mostly) Unregulated Industry

By Guest Blogger: Cheryl Donahue

Editor's Note: Dealing with merchant card service providers in business can be costly. That’s why I invited Cheryl Donahue to guest blog and provide insight to help save us some $$$$. This is part one of her three part series. 

Behind the system that allows a practice to collect credit card payments is a complicated and largely unregulated industry. Chances are, this revenue collection system costs significantly more than needed and is currently siphoning money straight out of your practice. Welcome to the Merchant Services Industry, where acquisitions are common and fraud abounds.

Today, we dive into Part 1 of the Merchant Services 101 Three Part Series. We will examine a few aspects of the merchant card services industry that will not only make you a more informed consumer, but also provide tools to better evaluate your practice’s statements. Let’s dig in!

Merchant services is a largely unregulated industry. As incredible as it seems, there is very little regulation in the merchant services industry. Merchant processing companies, hereafter referred to as “processors,” can add or increase fees without requiring notification.

Occasionally, there might be a notice at the bottom of your practice's monthly statement informing of an upcoming rate increase; however, we have discovered many increases where no preceding message was ever sent.

Rate increase is common. When one processor is acquired by another processor, your practice is likely to experience a rate increase within six months to one year of the acquisition.  Two of the three biggest processors catering to the healthcare industry have been sold in the last year and a half. Since then, we have discovered that 90% of our clients using one of these two processors have had their rates increased.

So, how do you know if your practice has been affected? Look at the statement, has the processor name or the format of the statement changed recently? If so, watch out!

What’s worse is that these increases have occurred with no notification to the practice.  Too often, increases are hidden toward the bottom of statements, typically being included in the ‘Other Fees’ or ‘Surcharges’ sections. The only way to determine if there was an increase is to examine the specific line items on each statement.

How about a spot check? Pick five to ten line items on the statement and see if the costs have increased from one statement to the next. As an example, pick the Technology and Security Fee, Authorization Fee, DISC fee, etc. It is critical to perform a spot check each month, as most processors only allow 30-60 days for an error to be corrected. After this time period, you can still request that they lower the fee or fix an error, but, unfortunately, the refund deadline has passed.

Determine your effective rate. The practice's effective rate is determined by taking the total fees charged in a particular month and dividing that number by the total credit card volume processed in the same month. The rate will fluctuate each month based on the credit card types processed.

For instance, one month the practice might accept more debit cards which usually cost less to process than an airline miles reward card. Although there will be fluctuations each month, if those fluctuations are more than 0.20%, the practice's rates have most likely increased.

Coding errors happen without accountability. When a merchant account is initially set up, the data entry is performed by a human being and human beings are prone to error. The person entering the data may have had a bad morning, not enough sleep or committed a simple typo; either way, the mistake could be costing the practice.

In one case, we identified a practice not coded properly with American Express, causing that practice to be charged an unnecessarily high rate for years. While the error was finally corrected, the processor refused a refund for the overcharges. Why? The processor simply isn’t required to, proving again the lack of regulation in the industry.

Mid and non-qualified charges can double your cost. On the practice's statement, does it list mid-qualified or non-qualified line items? Do you know the definition of mid or non-qualified items? If not, don’t worry; no one else does either. Amazingly, there is no industry standard definition for these terms. If you call and ask your processor, they will likely tell you those categories are credit card transactions that do not qualify for the practice's base rate. Okay...that clears it all up, doesn’t it? If there is a large amount of mid and non-qualified charges, call the processor immediately for an explanation, ask them to educate you on ways to avoid them.

Watch out for costly procedural errors. When the processor initially creates the new merchant account, there was most likely a training session. However, changes in equipment, industry standards (such as chip cards), and employee turnover means the practice may no longer be following the best practices of card acceptance.

To get the most out of your merchant service, your team must use proper procedures when accepting a card. The same card taken by the practice will cost you different amounts depending on how it is accepted. Keying in a credit card costs more than swiping or chipping a card. If a team member is not entering additional information such as zip code or street number, those transactions may cost more.

Sometimes, the processor will set up the practice's equipment or software incorrectly and the system will not prompt for this additional information. Moral of the story, stay aware of merchant card provider changes and be vigilant when entering cards.

Skip the credit card insurance reimbursements. Are you accepting insurance reimbursements via a credit card number that is “keyed” into the system? These card brands charge a higher interchange rate to process a keyed sale versus a card present at sale.

Corporate cards have some of the highest costs. If your practice is accepting credit card payments from insurance companies, you have a double whammy: a keyed transaction on a corporate card. Call the insurance companies and insist they send a check, or electronic funds transfer directly to the practice's bank account instead.

Join me for Part 2 when we examine Payment Card Industry Compliance.  You will learn why a practice needs to be compliant, how to determine it is compliant and how PCI Compliance overlaps the HIPAA Security Rule.

Cheryl Donahue is the Director of New Business at Merchant Advocate. Founded in 2007, Merchant Advocate is the trusted source in merchant services, providing fairness and transparency in the unregulated credit card processing industry.  We provide exceptional results and increase bottom lines by protecting our customers from unfair rates, fees and hidden costs.

You may contact Cheryl with questions or to receive a free analysis on your merchant statement by emailing her at cdonahue@merchantadvocate.com or calling 720-526-5318