Monthly bookkeeping checklist for a medical practice

A monthly close for a medical or dental practice is not a generic bookkeeping checklist with the word medical added. The block that decides whether the month is actually right is the revenue cycle: patient and insurance accounts receivable, denials, contractual adjustments and the net collection rate. A general checklist buries that in one line. This one leads with it, then runs the standard close, and ends with the monthly reports. You can copy the whole thing straight into your close process.

Block 1: the revenue cycle (do this first)

This is the part that makes it a medical close. Everything here comes from the practice management system reconciled to the books, and it is where most practices find money they did not know they were losing.

• Reconcile the practice management system or electronic health record to the accounting records for the month.

• Reconcile every payment type, patient card payments, electronic transfers, checks and cash, and confirm each day's collections were deposited in full.

• Review accounts receivable split into patient A/R and insurance A/R, so a stall on one side is not hidden by the other.

• Work denied, rejected and unusually delayed claims, and log the reason codes.

• Book insurance write-offs and courtesy discounts as contra-revenue, not as an expense, so net revenue is right.

• Record refunds and adjustments with documentation.

• Check the net collection rate, collections divided by net production, and compare collections to production for the month.

Block 2: bank, card and cash reconciliation

• Reconcile every practice bank account and business credit card to the ledger.

• Reconcile petty cash and any merchant clearing account.

• Record bank charges, merchant fees and interest, and confirm transfers between accounts are recorded once.

• Investigate stale, duplicate or unusual transactions.

Block 3: expenses and accounts payable

• Enter and categorize all vendor invoices, including lab, medical supplies and consumables.

• Confirm recurring costs landed correctly, rent, utilities, software, equipment leases and maintenance.

• Review unpaid bills and upcoming obligations, and flag unusually high or unexpected expenses.

• Confirm staff reimbursements are supported by receipts and approvals.

Block 4: payroll and staff costs

• Reconcile payroll to the payroll register, including salaries, overtime, bonuses and any provider compensation splits.

• Record employer payroll costs and reconcile payroll liabilities.

• Confirm payroll taxes and withholdings were remitted on time.

• Note any change in staff compensation or benefits for the following month.

Block 5: fixed assets, financing and taxes

• Review capital purchases, decide expense versus capitalize, and record depreciation.

• Update the fixed-asset register for additions and disposals.

• Reconcile equipment loans and financing, splitting principal from interest, and record finance charges.

• Reconcile tax ledgers and any sales-tax and payroll-withholding accounts, and note filing deadlines for next month.

Block 6: month-end adjustments

• Record accruals, prepaid allocations and depreciation.

• Review accounts-receivable aging and accounts-payable aging.

• Confirm revenue and expenses are in the correct period, and investigate any negative or unusual balances.

Block 7: produce and review the monthly reports

• Generate the profit and loss statement, the balance sheet and the cash-flow view.

• Review the cash position and the net collection rate together, because revenue is not cash.

• Review revenue and collections by provider or location.

• Compare actual results against budget and against the same month last year, and write down what changed and who owns fixing it.

What a generic checklist misses

A general bookkeeping checklist will usually get blocks two through seven right. It falls short on block one, and that is the block that makes a medical close different. Three things go wrong most often. The revenue cycle is treated as one line rather than the part that decides whether the month is right, so patient versus insurance receivables, denials and the net collection rate get lost. Insurance write-offs get booked as an expense instead of contra-revenue, which makes net revenue and the collection rate wrong. And nothing reconciles the practice management system, where production and collections actually live, back to the accounting file, so the profit and loss statement can look fine while cash and receivables say otherwise. Put block one first and those three problems mostly disappear.

How Numetix runs this checklist

Numetix runs the medical close every month in this order, with block one first. Production, adjustments, collections and the patient-versus-insurance receivable split come from the practice management system and are reconciled to the QuickBooks Online file, so the numbers tie out to the bank. The output is the monthly report package on a predictable close date rather than a checklist the owner has to work through on a weekend. The exact statutory and platform steps depend on the practice, its state and its systems.

This checklist is general guidance, not accounting or tax advice. The specific tax, payroll and statutory steps depend on the practice's state, entity type and systems. Numetix reconciles from a practice's own practice management system to its accounting file; the platforms and steps supported depend on the practice.

Related reading: the eight monthly reports and the KPI dashboard, reconciling insurance and patient payments, contractual adjustments, the dental monthly report, profitability by provider and location and the medical chart of accounts.