What are some ways in which accounting for healthcare organizations, especially not-for-profits, tend to differ from accounting in other industries?

Accounting for the not for profits healthcare organizations differ in many ways from accounting in other industries. I previously worked for a non profit organization and their financials were a huge part of the decision making regarding every aspect in the company. The organization received over 50 percent of revenue from grants. In order to uphold the contract to receive the grant there was a lot of paperwork and things the organization had to agree to do. Most of the contracts entailed the company giving a detailed summary of how the money was spent towards helping the clients. There were many stipulations on the money and it could not be used for personal use. For example, the grants could not be used to purchase furniture, office supplies, fuel, or groceries for staff. The grants were used to help pay for expenses for clients such as medication, psychiatrists fee, group therapy, individual therapy, inpatient treatment, and outpatient treatment. I had to prepare a weekly and monthly budget and actual expenses spent on clients. I had to also create a weekly summary of expenses used on each client. According to Cleverley, Cleverley, Song (2011), “balancing sheets, statement of revenues & expenses, statement of cash flows, & statement of changes in unrestricted net assets” are accounting strategies used by non profit organizations (p.207). The organization is located in 9 counties. It is very hard to keep up with the expenses since there is only one accountant/financial adviser for the entire company. The organization started delegating county administrators, grant coordinators, and the coordinators over the entire adult & children services for the company to help with the financial reports and budgeting as well. Some of the grants all totaling over a million dollars each and speaking from experience it is very hard to keep up with the expenses especially for hundreds of people. I was fortunate to see all these individuals come together and make the job of the accountant less stressful. The accountant had the very hard job of cutting back in certain areas to make sure that the employees were compensated and even still the employees were under paid. I said all this to say that the accountants and the accounting in non profit organizations should be respected a little more. I have a new found respect for accounting because there are so many entities that go into keeping the finances afloat and the doors open in non profit organizations.

Cleverley, W.O., Song, P.H., & Cleverley, J. O.(2011). Essentials of healthcare finance(7th ed.). Sudbury, MA: Jones and Bartlett Learning.

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