Types of Accounts
Checking and savings accounts are the two primary types of accounts.
Checking Accounts
The checking account is the primary account type the medical assistant will use in the ambulatory care setting. Stated simply, a checking account allows the depositor to write checks against money placed in the account. Today, there are many variations on checking accounts; in the event that the medical assistant is responsible for establishing a new account, it is worthwhile to investigate features of different checking accounts both within the same bank and at competing banks.
Some features that may differ include:
· Interest paid
· Monthly fees
· Per check fees
· Automated teller machine (ATM) access and fees
· Initial deposit and balance requirements
· Fees for checks
· Special services extended free of charge such as notary, cashier's checks, traveler's checks, balance reconciliation, and services designed expressly for small businesses.
When selecting an account, do not only choose the account with the lowest fees. Also consider convenience, the relationship possible with a given bank, number of bank locations, and other factors.
Savings Accounts
Savings accounts were initially distinguished from checking accounts because they paid interest on the money deposited. However, many checking accounts also pay interest now as well. In either case, the interest is usually minimal on accounts that give immediate access to the deposit. Some money market savings accounts pay a higher rate of interest, although they require a higher initial deposit and maintenance of a higher balance, usually around $2500. Access to the account is limited; often the depositor is permitted to write three checks a month on the account. Savings accounts are useful when money is not needed on demand or when putting monies aside for long-term goals.
Types of Checks
For the most part, the ambulatory care setting will use a standard business check. However, for special purposes, it is useful to understand the other check types available:
· A cashier's check is often used when a check must be guaranteed for the amount in which it is written. Because a cashier's check is the bank's own check drawn against the bank's accounts, the recipient has the assurance that the check will clear. Cashier's checks are obtained at the bank by paying the bank representative cash or sometimes a personal check for the amount of the cashier's check.
· A certified check is the depositor's own check which the bank has "certified" with a date and signature to indicate that the check is good for the amount in which it is written.
· Money orders are available from banks and the United States Postal Service. They are purchased with cash and are used in ways similar to cashier's checks.
· A voucher check is a type of check with a stub attached to it which can be used to indicate invoice dates, services provided, and so on. Many payroll checks are written on voucher checks; the voucher check is also frequently used in the ambulatory care setting for accounts payable.
·Traveler's checks are available in most banks and are convenient and safer to use than cash when traveling. They are written in specific denominations ($10, $20, $50) and require a signature when purchased and when used.
Deposits
Deposits are usually made daily since they serve as another proof of posting and because it is unwise to leave large sums of money in the office overnight. The office should have a rubber endorsement stamp from the bank to imprint on the back of all checks before depositing. Be sure all checks are stamped before making the deposit slip. Because the endorsement transfers rights to whoever holds the check, it is important to take certain precautions. A blank endorsement consists of a signature only (whether in pen or with a stamp) and presents a danger in that, if the check is lost or stolen, someone else could endorse the check below the signature and cash it. A restrictive endorsement should be used on all checks received in the ambulatory care setting. Restrictive endorsements include the signature as well as the words "for deposit only" or "pay to the order of (include the name of bank)." This restricts the use of the check should it be lost or stolen.
Most business accounts use a deposit slip similar to the one in Figure 17-8. They are always filled out in duplicate one copy to accompany the deposit, one to be retained for office records. As shown, these deposit slips are longer than those generally used for personal accounts and have room for more entries and more information. If your day sheet has a built-in duplicate deposit slip, it will have been completed during posting.
Checking and savings accounts are the two primary types of accounts.
Checking Accounts
The checking account is the primary account type the medical assistant will use in the ambulatory care setting. Stated simply, a checking account allows the depositor to write checks against money placed in the account. Today, there are many variations on checking accounts; in the event that the medical assistant is responsible for establishing a new account, it is worthwhile to investigate features of different checking accounts both within the same bank and at competing banks.
Some features that may differ include:
· Interest paid
· Monthly fees
· Per check fees
· Automated teller machine (ATM) access and fees
· Initial deposit and balance requirements
· Fees for checks
· Special services extended free of charge such as notary, cashier's checks, traveler's checks, balance reconciliation, and services designed expressly for small businesses.
When selecting an account, do not only choose the account with the lowest fees. Also consider convenience, the relationship possible with a given bank, number of bank locations, and other factors.
Savings Accounts
Savings accounts were initially distinguished from checking accounts because they paid interest on the money deposited. However, many checking accounts also pay interest now as well. In either case, the interest is usually minimal on accounts that give immediate access to the deposit. Some money market savings accounts pay a higher rate of interest, although they require a higher initial deposit and maintenance of a higher balance, usually around $2500. Access to the account is limited; often the depositor is permitted to write three checks a month on the account. Savings accounts are useful when money is not needed on demand or when putting monies aside for long-term goals.
Types of Checks
For the most part, the ambulatory care setting will use a standard business check. However, for special purposes, it is useful to understand the other check types available:
· A cashier's check is often used when a check must be guaranteed for the amount in which it is written. Because a cashier's check is the bank's own check drawn against the bank's accounts, the recipient has the assurance that the check will clear. Cashier's checks are obtained at the bank by paying the bank representative cash or sometimes a personal check for the amount of the cashier's check.
· A certified check is the depositor's own check which the bank has "certified" with a date and signature to indicate that the check is good for the amount in which it is written.
· Money orders are available from banks and the United States Postal Service. They are purchased with cash and are used in ways similar to cashier's checks.
· A voucher check is a type of check with a stub attached to it which can be used to indicate invoice dates, services provided, and so on. Many payroll checks are written on voucher checks; the voucher check is also frequently used in the ambulatory care setting for accounts payable.
·Traveler's checks are available in most banks and are convenient and safer to use than cash when traveling. They are written in specific denominations ($10, $20, $50) and require a signature when purchased and when used.
Deposits
Deposits are usually made daily since they serve as another proof of posting and because it is unwise to leave large sums of money in the office overnight. The office should have a rubber endorsement stamp from the bank to imprint on the back of all checks before depositing. Be sure all checks are stamped before making the deposit slip. Because the endorsement transfers rights to whoever holds the check, it is important to take certain precautions. A blank endorsement consists of a signature only (whether in pen or with a stamp) and presents a danger in that, if the check is lost or stolen, someone else could endorse the check below the signature and cash it. A restrictive endorsement should be used on all checks received in the ambulatory care setting. Restrictive endorsements include the signature as well as the words "for deposit only" or "pay to the order of (include the name of bank)." This restricts the use of the check should it be lost or stolen.
Most business accounts use a deposit slip similar to the one in Figure 17-8. They are always filled out in duplicate one copy to accompany the deposit, one to be retained for office records. As shown, these deposit slips are longer than those generally used for personal accounts and have room for more entries and more information. If your day sheet has a built-in duplicate deposit slip, it will have been completed during posting.