In today’s hospital environment, the patient journey is more than just clinical—it’s a chain of financial events that influence revenue recognition, compliance, and operational efficiency. For CFOs, CIOs, and ERP consultants, aligning this journey with real-time accounting is key to ensuring healthy margins and data-driven decisions.
This blog walks through each major stage of the patient lifecycle, highlighting how accounting entries—from advances to COGS and claims—can be automated using Microsoft D365 Finance integrated with your HIS.
1. Admission: Start with Financial Readiness
Refer to: “Accounting Flow – Admission Stage”
Objectives:
- Capture patient and insurance details accurately
- Collect advance deposits based on estimated treatment costs
- Trigger immediate financial posting in ERP
Strategic Impact:
Advance collection ensures liquidity from Day 1 and reduces future disputes during discharge. Missed or delayed postings here create downstream reconciliation challenges.
System Considerations:
Your HIS should immediately push the advance amount to D365, booking it as a liability tied to the patient ID for real-time traceability.
📎 This accounting flow illustrates how advance deposits collected at admission are posted in real time as liabilities in D365 Finance.
2. In-Patient Care: Let Billing Run in Parallel
Refer to: “Accounting Flow – In-Patient Billing”
Objectives:
- Capture ongoing services: room charges, pharmacy, diagnostics, nursing
- Generate interim bills aligned with real-time service usage
- Prepare financial records for smooth discharge later
Strategic Impact:
Without real-time billing, hospitals face billing backlog and delayed cash realization. Capturing transactions as they occur provides financial visibility across departments.
System Considerations:
Services consumed should trigger revenue recognition via HIS-to-ERP integration, eliminating manual batching and improving accuracy.
📎 This flow shows how daily services from HIS (labs, room, pharmacy) trigger revenue recognition and patient billing entries.
3. COGS Entry Flow: Linking Inventory to Profitability
Refer to: “Accounting Flow – COGS and Material Issue”
Objectives:
- Record material consumption in real time
- Keep stock balances accurate
- Calculate margins accurately at patient or department level
When It Happens:
- In IPD: When materials (medications, implants) are issued to a patient—before billing
- In OPD/Pharmacy: When items are sold or dispensed—alongside billing
Strategic Impact:
Delayed COGS recognition inflates profit and leaves inventory mismatches. Real-time COGS gives finance a true view of costs and margins.
System Considerations:
Each material issue should:
- Credit inventory
- Debit COGS
- Link to patient ID or encounter for tracking
📎 This diagram highlights how materials issued to patients automatically credit inventory and debit COGS accounts—ensuring real-time consumption tracking.
4. Discharge: Accuracy Over Speed
Refer to: “Accounting Flow – Final Billing & TPA Reconciliation”
Objectives:
- Consolidate all pending charges into a final bill
- Adjust advance deposits accurately
- Reconcile TPA amounts and initiate settlement or refunds
Strategic Impact:
A discharge process that depends on manual billing delays patient movement, increases dissatisfaction, and causes cash-flow bottlenecks.
System Considerations:
ERP should automatically:
- Pull all billed services
- Apply advance adjustments
- Calculate the final net due or refundable amount
Journal Entry for Advance Adjustment:
Advance Refund
When the final bill is less than the advance, the balance amount is refunded to the patient.
Journal Entry Example:
📎 This flow outlines how final bills consolidate all charges, adjust advances, and calculate net payables or refunds—fully automated in ERP.
5. Post-Discharge: Refunds & Claims Reconciliation
Refer to: “Accounting Flow – Refunds & Claim Reconciliation”
Objectives:
- Process surplus refunds to patients on time
- Submit insurance claims to TPAs and track their status
- Ensure audit-ready closure of patient financials
Strategic Impact:
Unprocessed refunds damage patient trust. Delayed TPA claims impact receivables. Finance needs automated workflows and dashboards to close these loops efficiently.
System Considerations:
- Refunds should be automatically posted to accounts payable
- TPA claims must feed into a claim reconciliation dashboard, tracking rejections, cycles, and settlements
Post-Approval Action:
- Once the amount is received in the bank, the user manually records the entry in the bank book
- TPA payment details are received later, it settles the TPA control account.
- TPA Account Settlement
📎 This image shows how surplus refunds are processed and TPA claims are posted to clearing accounts, enabling full financial closure after discharge.
Executive View: What Success Looks Like
| Milestone | Outcome |
|---|---|
| Advance auto-posted at admission | Improves cash control from Day 1 |
| Real-time billing per service | Prevents missed revenue and simplifies discharge |
| COGS recognized at material issue | Enables accurate profit tracking |
| Discharge bills generated in 10 mins | Speeds up patient movement |
| Refunds processed within 48 hours | Boosts trust and efficiency |
| TPA claims tracked with dashboards | Increases realization rates and reduces ageing AR |
Key Questions for ERP & HIS Alignment
- Are advances and COGS being posted in real time?
- Can we reconcile all patient financials from a single source of truth?
- Is inventory fully synced between HIS and D365?
- Are our refund cycles and claim closures automated and reportable?
- Are we capturing cost-to-care data that helps inform strategic decisions?
How MindCurve Adds Value
MindCurve helps hospitals unify financial and operational workflows using Microsoft D365 Finance and tight HIS integration. We enable hospitals to:
- Post advances and billing events in real time
- Auto-track inventory consumption and COGS
- Integrate TPA approvals and claims
- Monitor refund and insurance dashboards
- Build a clean, auditable financial trail per patient
📞 Let’s align your hospital’s patient care with financial precision.
