8 Simple Definitions About Billing and Invoicing

Written by SimplePractice on December 19, 2015

We’ve re-thought the process!

 

At SimplePractice, we spend a lot of time coming up with ways to make your life better. And lately, our focus has been on improving how you get paid. We’ve spent countless hours over the past few months redesigning our billing system, which we just rolled out this weekend. The billing update introduces many awesome features, including invoicing, billing automations and client payments through the portal. We re-thought the entire billing process, so you can spend less time collecting payments and more time doing what you love (and hey, if you love billing, our redesign will make you love it even more).

We hear frequently from our customers that billing can create anxiety and uncertainty. Many of you say you want to do billing more efficiently but don’t know where to start. For too many it’s a process to dread—but it is a necessity if you want to get paid.

Over the next several weeks, we’ll be publishing a series of blog posts about billing, invoicing and money matters in your practice. We want to dispel a lot of your concerns and uncertainties, so you can more confidentially and efficiently manage your practice.

 

Why We Decided to Call It Billing Instead of Invoicing.

 

In preparation for our product update, we considered whether we should call it our Invoicing or Billing release. Invoicing suggests something only Serious Business People do and may create more confusion. Billing, on the other hand, includes payment tracking, statements, insurance reimbursement, and generating superbills and claims. Creating an invoice is just one step within that process, and getting better at invoicing just means you’re good at sending bills. Building a more streamlined billing process will help your entire practice run more smoothly.

 

 

8 Simple Definitions.

 

Since knowledge is the first step in any new undertaking, below we’ve defined eight common billing terms. By evaluating your current knowledge and filling in any gaps, you can better design and develop your personalized billing system.

 

1. Billing: The process of generating invoices and sending bills to collect money owed after a transaction has been completed. Billing encompasses multiple processes or steps, including setting invoicing frequency, sending bills and processing payments, defining accepted payment methods, and generating appropriate records and documentation.

2. Bookkeeping: The process of recording or posting financial transactions, including logging debits and credits, producing invoices and balancing ledgers.

3. Claim: An itemized statement of medical costs owed after health care services have been provided. A claim is usually ordered by date of service, lists the services provided and includes an itemization of costs. Claims are often submitted as a CMS 1500 form, which was previously called a HCFA form.

4. Invoice: A physical or digital record documenting a transaction and indicating that a financial obligation is due. An invoice details a purchase, including the cost per item, how to submit payment and when payment is due.

5. Ledger: A record that sorts and stores account balances, invoices and financial transactions.

6. Receipt: A document that finalizes a sale and proves payment has been made for services or products provided. Unlike an invoice, a receipt does not necessarily itemize the services provided and typically does not include details on how to submit a payment.

7. Statement: A statement serves as an informational document which summarizes the total amount owed and specifies how a balance was determined. Statements provide a snapshot of all outstanding invoices and a breakdown of services, and can indicate balances paid during the previous billing cycle and the length of time each invoice has been outstanding. Statements can be used by your client to submit for FSA/HSA reimbursement (but not for insurance reimbursement—claims for health insurance reimbursement require a superbill).

8. Superbill: An itemized document of services used by a client to seek insurance reimbursement. The superbill typically includes the practitioner’s name, address and NPI; visit information and date of service; and ICD-10 diagnosis code and billing code. If your client submits for insurance reimbursement on their own, they’ll need a superbill to file their claim. Most out-of-network providers give clients a superbill at the end of every month.

What Are Your Biggest Questions or Concerns About Billing? We love to hear from our customer community. Share your thoughts below!

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About the Author

SimplePractice is a top-reviewed practice management platform, made specifically for small business owners in the health and wellness space. Unlike other systems, which try to make you conform to their way of doing things, we believe that you should have the freedom to run your practice the way you’d like. SimplePractice’s industry-leading feature set includes secure messaging, customizable paperless intake forms, a template library, free appointment reminders (SMS, email, & voice), electronic claim filing, billing and invoicing, a beautiful client portal with online appointment booking, and more.

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