Medical & Dental Practices
Bookkeeping and accounting for practices where insurance reimbursements, equipment depreciation, and provider compensation add real financial complexity.
The Industry
A chiropractor sees 25 patients on a Tuesday. She bills $4,500 across various CPT codes. Insurance contracts reduce the allowed amounts to $2,900. Copays collected at the front desk total $625. The remaining patient responsibility gets billed out, and maybe 60% of those balances eventually get paid. Real collected revenue on that $4,500 production day lands somewhere around $3,100. She’s been spending based on what she bills, not what she collects. The gap builds quietly and doesn’t show up until cash gets tight despite a full schedule.
Medical and dental practices deal with a revenue cycle that most businesses never have to think about. You perform the service, submit the claim, wait for adjudication, accept a contractual adjustment, collect the patient’s portion, and then chase the remaining balance. That process can take 30 to 90 days per claim. Meanwhile, payroll runs every two weeks, rent is due on the first, and supply orders ship on net-30 terms. A practice can be fully booked every day and still have cash flow problems because of the delay between production and collection.
Who This Covers
Who This Covers
Dentists, chiropractors, optometrists, physical therapists, dermatologists, and other private practice healthcare providers across Franklin, Williamson County, and the Greater Nashville area. Solo practitioners and multi-provider groups alike.
What Makes It Complex
What Makes It Complex
Multiple insurance payer contracts with different fee schedules and reimbursement rates. Contractual adjustments that reduce billed amounts before you collect anything. Patient responsibility portions that need separate tracking and follow-up. High-cost clinical equipment with depreciation schedules. Payroll for clinical and administrative staff. Supply and materials inventory. Continuing education and licensing costs that recur every year.
What We Handle
Practice accounting starts with understanding the difference between production, billings, and collections. Most practice management software tracks clinical production well, but the accounting system needs to reflect what actually gets collected and what gets written off. We set up QuickBooks to work alongside your practice management system so you can see true collected revenue, not just what was billed. Contractual adjustments, patient write-offs, and insurance denials all get categorized properly so you know exactly where revenue is leaking.
Equipment purchases in healthcare are significant. A dental chair, a digital X-ray system, a laser therapy unit. These need proper capitalization and depreciation. Tax planning should account for Section 179 deductions and bonus depreciation on qualifying equipment so you are not overpaying taxes during years with major purchases. Payroll for a mix of providers, hygienists, assistants, and front desk staff gets handled with correct withholdings and benefits tracking. Quarterly estimates reflect your actual collection patterns instead of rough guesses from last year.
Revenue Tracking and Reconciliation
Revenue Tracking and Reconciliation
Collections reconciled to practice management reports monthly. Contractual adjustments and write-offs categorized by payer so you can evaluate which insurance contracts are actually worth keeping. Patient balance aging tracked to flag collection issues early. QuickBooks configured to show collected revenue by provider and service type so monthly financials reflect reality.
Tax Planning and Equipment Strategy
Tax Planning and Equipment Strategy
Section 179 and bonus depreciation applied strategically on major equipment purchases. Entity structure reviewed to minimize self-employment tax on owner compensation. Quarterly estimates calculated based on actual collection patterns. Retirement plan contributions factored into your overall tax strategy. Annual returns prepared with healthcare-specific deductions fully captured.
Common Problems
The most common problem is confusing production with profitability. Your practice management software says you produced $85,000 last month. But after contractual adjustments, denied claims, and uncollected patient balances, actual collections were $58,000. If your overhead runs $52,000 per month, that gap between $85,000 and $58,000 is the difference between a thriving practice and one that barely breaks even. Owners who budget and spend based on production numbers instead of collection numbers consistently run into cash shortfalls they did not see coming.
Equipment gets expensed wrong or depreciated on the wrong schedule. A $40,000 digital imaging system purchased in March should be capitalized and potentially deducted under Section 179 in the current tax year. Instead it gets lumped into a general expense category or spread over the wrong useful life. The tax benefit is either lost or delayed by years. Multi-provider practices add another layer. When two dentists share overhead but compensate based on individual production, the allocation of shared expenses like rent, staff salaries, and equipment needs to be clearly documented and agreed upon. Without that, partner disputes and messy tax filings follow.
Production vs. Collection Confusion
Production vs. Collection Confusion
Spending decisions made based on what you billed rather than what you collected. Monthly overhead calculated against production numbers that overstate actual revenue. Cash flow projections that ignore the 30 to 90 day lag between service delivery and payment. Practices that look profitable on the schedule board but struggle to make payroll on time.
Tax and Entity Structure Oversights
Tax and Entity Structure Oversights
Equipment depreciation missed or misapplied on major purchases. Owner compensation not structured to reduce self-employment tax exposure. Retirement contributions not optimized as part of a broader tax strategy. Multi-provider practices without clear expense allocation creating partner friction and tax filing complications at year-end.
What Changes
Financial decisions get based on collected revenue, not production. Monthly reports show actual collections by payer and by provider so you can evaluate which insurance contracts deserve your participation. You see the gap between what you bill and what you collect, broken down by insurance company, and that data supports contract renegotiation or panel decisions. Provider compensation in multi-doctor practices ties to verifiable numbers instead of rough estimates or assumptions.
Tax planning happens throughout the year instead of as an afterthought in April. Equipment purchases get timed and structured for maximum tax benefit. Your entity structure gets reviewed so you are paying yourself in a way that minimizes unnecessary tax. Quarterly estimates reflect your actual collection patterns so there are no surprises at filing time. Payroll runs on schedule without consuming your office manager’s afternoon. You focus on treating patients while the financial side of the practice runs cleanly in the background.
Payer and Provider Visibility
Payer and Provider Visibility
Collections analyzed by insurance company showing real reimbursement rates and denial patterns. Per-provider profitability in multi-doctor practices based on actual collected revenue. Patient balance aging reports that flag collection problems before they turn into write-offs. Data that supports informed decisions about which insurance panels to join, renegotiate, or leave.
Tax Savings and Financial Clarity
Tax Savings and Financial Clarity
Equipment depreciation maximized through proper Section 179 and bonus depreciation elections. Entity structure optimized for your income level and practice setup. Retirement plan contributions coordinated with your tax strategy to reduce liability. Clean financials that support practice expansion, loan applications, bringing on a new provider, or eventual sale of the practice.
Greater Nashville's Trusted Financial Partner
The Next Step:
A Quick Conversation
Tell us about your business and where you need support. We'll listen, figure out what makes sense for your situation, and give you a straightforward quote.
