Category 6 of 12

Accounting & Finance

Finance closes the books on a different clock and definition than operations runs the building. These questions cover month-end, provenance, adjustments and forecasting.

1. Why does accounting disagree with operations?

   Accounting and operations measure the same organization on different clocks and definitions.

2. Why does month-end census differ from daily operating census?

   Month-end census reflects accounting adjustments made after the fact: late admissions and discharges, bed-hold treatment, payer corrections and billing cutoffs.

3. How should senior living operators reconcile revenue and census?

   Reconcile revenue and census at the resident-day level.

4. Which occupancy number should the CFO use?

   The CFO should use the occupancy definition approved for each audience: billable occupancy for financial results, contractually defined occupancy for lender covenants, and a labeled operating occupancy for management.

5. How can finance verify the provenance of an operating number?

   Finance can verify provenance when each operating number carries its lineage: the sources and values it came from, the definition and calculation, any adjustments or overrides, and who approved each determination.

6. How should adjustments to operating data be documented?

   Document each adjustment with the original value, the adjusted value, the reason, the supporting evidence, the approver, the date, the period affected and the reports affected.

7. How do conflicting numbers affect budgeting and forecasting?

   Conflicting numbers make budgets and forecasts rest on unclear baselines.

8. How can operators reduce spreadsheet-based reconciliation?

   Operators reduce spreadsheet reconciliation by moving the rules out of spreadsheets: approved definitions, authority rules and recurring resolution patterns applied every day as data arrives, with exceptions sent to named owners.

9. How should financial systems interact with clinical systems?

   Financial systems should receive clinical events that affect revenue and cost, such as admissions, discharges, leave and care-level changes, under operator-approved definitions and timing rules, with a reconciliation step that catches differences.

10. How can executives know whether a financial KPI is based on governed data?

    A financial KPI is based on governed data when it states its approved definition, its authoritative sources, how any disagreements were resolved, and its lineage, and when those details can be inspected.