FROM MY PT SCHOOL NOTES · HEALTHCARE SYSTEMS · UNIT 3 · CHAPTER 11
Accounting language every PT should know
11 Accounting language every PT should know Which financial number actually tells you what a clinic earned?
Core ideas from class
- Separate gross billed charges, contractual adjustments, net patient-service revenue, collected cash, operating expenses and operating result; they answer different financial questions.
- Assets are resources controlled by the organization; liabilities are obligations; equity is the residual interest. These belong on the balance sheet.
- An income statement measures results during a period; a balance sheet is a snapshot of assets, liabilities and equity; a cash-flow statement tracks cash entering and leaving.
Think like a PT
Clinic X bills $47,000 and has $16,450 in contractual adjustments, leaving $30,550 in net revenue; with $27,915 in recorded expenses, its operating surplus is $2,635. This does not tell us how quickly claims are collected.
Remember
Charges are not cash and revenue is not profit.
Historical source note: Accounting definitions are explained conceptually; actual organization-specific reporting may classify items differently.
From my class sources: 3 Accounting.pdf ⭐️. These are personal school notes with additional editorial context, not current legal advice, payer guidance, a coding manual, or a guaranteed reimbursement rule. Verify any current policy directly.
