Period Close: Purpose and Logic

Period Close: Purpose and Logic

Closing a Period prevents the Post Dates in the Closed Period from being used for new Transactions, ensuring that the Closed Period figures will never change.

Reasons for Closing at the End of Each Month

Month-end Closing is important for multiple reasons:

Financial and Cash Flow Management

  • Accurately report your financial status and comply with financial regulations.
  • Reconcile accounts payable and accounts receivable for accurate records of their cash flow.


Accurate Tax Reporting

  • Preparation for tax filing.
  • Once you have given your financials to the accountant for the month, closing the Period will prevent any changes being made after the fact.


Accurate Production Payments

  • A Billing Service is paid a percentage (%) of their production.
  • If the Period is closed, Charges and Payments cannot be posted, which would change the percentage.


Error Prevention

  • Catch errors before they become a problem.


Common Period Close Philosophies

Closing a Period is dependent on your office's workflow for end-of-month reporting. There are four basic methods that are mostly used.


Consistently Close at the End of the Month

  • Even though all of the production for the month may not be posted by the end of the month, the Period is closed regardless.
  • Some of the previous month's Charges and Payments will always be posted in the next month.
  • Example: The Period is closed on the last day of March even though there are still some March Charges and Payments that have not been posted.
  • These Charges and Payments will be posted and reported in April, which will not affect the DOS.


Close the Period whenever Posting is Completed for the Month

  • Since the production for February might not be known until March 5th, keep posting February production until March 5th.
  • Close the Period when all of February's posting is completed.
  • Example: February posting is not completed until March 5th.
  • February is held open until March 5th.
  • No March Payments are posted until February is completed and closed.
  • The Period is closed using the March 5th date.


Use the Last Day of the Month for the Closing Date

  • Use the last day of the month for the Period Close Date, but closing will actually take place on a date in the next month.
  • Example: March's production will not be posted until April 5th.
  • The month is held open until all February postings have been completed.
  • The numbers that go in February and March are controlled by the Post Date on the Reference Batch.
  • Billers posting February Payments will use a February Post Date in the Reference Batch.
  • Billers posting March Payments will use a March Post Date in the Reference Batch.
  • When February is completed on March 5th, close the Period using February 28 as the Closing Date.
  • All February postings will be reported by Post Date in February, and all March postings will be reported by Post Date in March.


Use a Future Date as the Last Day of the Month for the Closing Date

  • The closing process is not officially done on the last day of the month, but on a date previous to the end of the month.
  • This is beneficial for your report titles, which will reflect actual days of the month.
  • This also allows users to close early if there is a holiday or the period ends on a weekend.
  • Example: For March, all posting will end on March 29 because March 31 is on Sunday.
  • When closing on March 29, use the future date of March 31.
  • Your report headers will display March 1 through March 31 instead of March 1 through March 29.
  • It prevents any further postings using a March Date.
  • No one can accidentally use March 29th or 30th.
  • Only April Dates will be used for the Reference Batches after the closing date of March 31.


Error Corrections

Undo Posting

Example 1: A $250 Payment was posted to the wrong Patient in January, but the error was not caught until March.

  • Undo the Payment: -$250.00 PP
  • Post it to the correct Patient: $250.00 PP

The Patient Payment of $250.00 is still reported accurately in January.

  • Net affect on Revenue in March: $0.00
  • Undo on incorrect Patient = -$250
  • Posted to another Patient: =  +$250
  • Alert: The patient on the Receipt will always show the original Patient.
  • When a Payment is undone, the money goes into Escrow to be posted elsewhere.
  • Since you will be in a different Period, you will be attached to a different Reference Batch than the original Receipt.
  • The System will create a new Receipt with Escrow equal to the amount that was undone.
  • Post the Receipt to the correct Patient: + $250.00 PP


Example 2: Same scenario as above with the following exceptions.

  • Undo the Payment in March: -$250.00 PP (Patient Payment)
  • Disburse the Escrow Receipt that is created automatically from the Undo.
  • This will be reflected on reports using the Post Date as a -$250.00 in March.
  • Create a new Receipt for $250.00 for the correct Patient.
  • Post it to the correct Patient.
  • There will be an offset on  reports by Post Date of -$250 and +$250 for a net result of $0.00.
  • The money that was posted in January is not affected and will be reported the same.
  • The Receipts will appear that you collected $30 more.
  • The disbursement of $30 is subtracted with a net result of $0.00


Reverse for Deletion

Example: An Encounter (CPT 99212) was posted in January for $100, but never should have been posted. The error was not caught until March.

  • Reverse for Deletion (done in March): -$100.00 Encounter created in March
  • The January production number is over by $100.00 and one too many units for 99212. 
  • The March production number is under by $100.00 and one less units for 99212.
  • The Q1 numbers and annual numbers will remain accurate.


Reverse for Modification

Example: An Encounter for $100.00 was posted in January but it should have been posted as $150.00. The error was not caught until March.

  • Reverse for Modification (done in March): -$100.00 Encounter and $150 Encounter created in March
  • The January production number is under by $50.
  • The March production is over by $50.
  • The Q1 numbers and annual numbers will remain accurate.




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