Where medical and dental practices books go wrong
Insurance deposits combine many claims, and the practice management system knows the detail while the bank only sees a lump sum. Booking the deposit as income without the remittance report hides adjustments and write-offs.
Patient copays and balances come through the front desk, a card terminal and an online portal. Each needs to tie to a daily report.
Dental and medical supplies, lab fees and equipment leases are large and irregular, which makes month-to-month margin hard to read without consistent accounts.
Accounts we set up for medical and dental practices
Your chart of accounts is reviewed during onboarding. These are the lines that usually matter most in this kind of business:
| Account | Why it is separate |
|---|---|
| Insurance collections | deposits matched to remittance reports |
| Patient payments | copays and balances from the desk, terminal and portal |
| Contractual adjustments and write-offs | tracked from practice management reports, not guessed |
| Lab fees | dental and medical lab charges by month |
| Clinical and office supplies | kept apart so supply cost per visit can be watched |
| Equipment loans and leases | split into interest and principal from lender statements |
| Provider compensation and staff payroll | tied to payroll reports each month |
Records the IRS describes
Form 1099-MISC lists medical and health care payments among the payments it reports, and Publication 1099 sets a $2,000 threshold for tax years beginning after 2025. Practices often receive these from insurers; the books should tie them to collections. Source: IRS: About Form 1099-MISC.
The IRS says to keep employment tax records for at least four years after the tax becomes due or is paid, whichever is later. Practices with several staff accumulate those records quickly. Source: IRS: How long should I keep records?.
For equipment, the IRS lists purchase and sales invoices and proof of payment as asset records. Source: IRS: What kind of records should I keep.
How long to keep them: the IRS says three years in most cases, longer in some situations, and at least four years for employment tax records (IRS: How long should I keep records?).
Cash through the year
Many practices see collections lag visits by a month or more, and deductibles resetting in January can shift more of the bill to patients early in the year. The monthly report shows collections against production so a slowdown in payments is visible.
Equipment purchases and annual license, insurance and association renewals tend to land in a few months. Seeing them in last year's books helps plan cash.
Contractors, employees and year-end forms
Hygienists, assistants and front-desk staff are usually on payroll. Associate providers and locum coverage are sometimes paid as contractors. The IRS decides worker status by behavioral control, financial control and the relationship of the parties; we record the arrangement you have and flag questions for your tax professional.
We work from summary reports: deposits, remittance totals, production and collections. We don't need patient records, and we do not ask for them.
What the monthly service includes
Every month, the same close the bookkeeping page describes: transactions categorized, bank, card and loan balances reconciled to statements, a profit and loss and balance sheet delivered, and a short list of questions instead of guesses. The books stay ready for your tax preparer at year end. For medical and dental practices, that close also covers:
- Insurance deposits matched to remittance totals, with adjustments recorded
- Patient payments tied to the daily payment report
- Collections shown beside production from your practice reports
Need more than the books? The service levels page describes a monthly review and CFO-style planning on top of the same close.
How remote onboarding works
- Tell us about your books. The short form asks what your books live in today, how many transactions you have a month, how many bank, card and loan accounts, how far behind the books are and what you need. You can ask for a 15-minute call instead of an email reply.
- Written quote and engagement letter. We review what you sent and reply with the scope and monthly price in writing before any work starts.
- Access, without passwords. QuickBooks Online: you invite us as an accountant user. Xero: you invite us with the Advisor role. Excel or Google Sheets: you share the workbook and we send a folder for statements. Nothing yet: we recommend QuickBooks Online or Xero and set it up in your name. You keep ownership and can remove our access.
- Opening balances and a close day. We confirm your accounts, collect recent statements and your prior-year return or financial statements, check opening balances, and agree the day each month's books are delivered.
What helps most for medical and dental practices:
- Monthly production, collections and adjustments reports from your practice management system
- Payroll provider reports
- Equipment loan and lease statements
Price
These are the starting prices the quote form uses. Your written scope sets the final price before any work begins.
| Transactions a month | Monthly bookkeeping | Catch-up |
|---|---|---|
| Up to 100 transactions a month | From $450 a month | $300 per month behind |
| 100 to 300 transactions a month | From $750 a month | $450 per month behind |
| 300 to 600 transactions a month | From $1,200 a month | $700 per month behind |
| Over 600 transactions a month | Custom quote | Custom quote |
- 2 bank, card or loan accounts are included; each additional account is $35 a month.
- Books kept in Excel or Google Sheets add $100 a month; starting from nothing adds a one-time $400 software setup.
- Reconciling the payroll your provider runs adds $100 a month.
- A monthly financial report and KPI summary is $125 a month on top of current books.
- Receivables follow-up, with invoice reminders and an aging review, is $100 a month on top of current books.
Prices shown are starting estimates, not quotes.