In short

Medical practice bookkeeping is built around remittances rather than invoices. Each insurance transfer is matched to its remittance advice, patient card batches are posted separately, and monthly collections in the practice-management system are tied to the bank. Contractual adjustments, patient refunds, payer recoupments and genuine bad debt each get their own account, so collection performance and net revenue are visible instead of buried in a single income line.

Posting a payer remittance

A single electronic payment from an insurer can cover dozens of claims. Our routine for each one:

  1. Match the bank transfer to the remittance advice by amount and trace number
  2. Record collections against the practice's revenue accounts at the summary level
  3. Record any recoupment or offset from a prior overpayment separately, so the deposit still reconciles
  4. Flag remittances that include interest, which is usually reported as other income

Patient payments taken at the front desk or online are posted by card batch, net of processing fees recorded as an expense.

Month-end tie-out

At month end we compare total collections in your practice-management report with deposits in the books. A gap usually has a short list of causes: a transfer that landed on the first of the next month, a refund issued from a different account, or a payer that bundled two remittances. Finding the cause each month keeps the year-end reconciliation small.

Patient refunds and credit balances

Overpayments create credit balances that eventually need refunding. We record refunds against the original revenue rather than as an expense and keep a short list of outstanding credits, which matters when a payer or patient asks for documentation later.

Records we keep for you

A remittance log, card batch reports, bank reconciliations and the month's financial statements, stored in one shared folder so your billing staff and tax preparer see the same numbers.

Key terms

Definitions for terms used on this page:

  • Debits and Credits: Debits and credits are the two sides of every bookkeeping entry; each account type increases on one side and decreases on the other.

Medical Practices problems this addresses

  • Insurance payments arrive weeks after the visit and rarely equal the billed charge
  • Contractual adjustments and write-offs get mixed up with true bad debt
  • Practice-management reports and the bank deposits never seem to agree
  • Provider compensation formulas depend on collections that are hard to measure
  • Equipment purchases and leases are large and need consistent treatment