7 Tips for Medical Professionals That Do Their Own Bookkeeping

For many doctors, dentists, therapists, and other healthcare providers, running a practice isn’t just about delivering exceptional patient care. It’s also about managing the business side of operations. Bookkeeping may not be as exciting as diagnosing a complex case, but accurate financial records is essential for profitability, compliance, and growth.

If you’re a medical professional considering doing your own bookkeeping, here’s a step-by-step guide on how to manage your finances.

1. Separate Your Personal and Business Finances

One of the biggest mistakes many business owners make, including medical professionals, is mixing personal and business transactions.

·       Open a dedicated business bank account and credit card

·       Deposit all income into the business account

·       Pay for business expenses only from that account

This separation keeps your records cleaner, simplifies tax preparation, and helps you avoid compliance issues.

2. Choose the Right Bookkeeping Software

Gone are the days of manual ledgers. Modern software like QuickBooksOnline can automate much of your bookkeeping.

Look for features that:

·       Integrate with your bank account

·       Track invoices and payments

·       Handle expense categorization

·       Generate financial reports

In addition, many specific needs a business may have, such as healthcare tracking insurance reimbursements, have APPS that can integrate with QuickBooksOnline.

3. Track All Income Sources

For medical professionals, income can come from multiple sources such as patient payments, insurance reimbursements, government programs, or consulting work. Make sure you:

·       Record payments promptly

·       Match payments to invoices and insurance claims

·       Monitor aging receivables so you can follow up on overdue accounts

Accurate income tracking helps you understand your practice’s true profitability and identify potential future cash flow problems.

4. Stay on Top of Expenses

Every expense must be logged and categorized correctly. Common categories for medical practices include:

·       Medical supplies

·       Office rent and utilities

·       Continuing education and licensing fees

·       Employee wages and benefits

·       Technology and software subscriptions

Keep digital copies of receipts. QuickBooksOnline allows you snap a photo and automatically store them.

5. Schedule Regular Bookkeeping Sessions

Bookkeeping isn’t something you should save for tax season. Set aside time each week or at least twice a month to:

·       Reconcile bank statements

·       Review unpaid invoices

·       Update expense records

·       Check cash flow reports

Consistency prevents small mistakes from becoming big problems. It’s best to outsource your bookkeeping to a professional so you can focus your time on what you do best: treat your patients.

6. Understand Your Tax Obligations

Healthcare providers may have unique tax deductions and reporting requirements. While you can do your own bookkeeping, it’s smart to work with a CPA at least once a year to ensure:

·       You’re taking advantage of all allowable deductions

·       Your payroll taxes are correct

·       Your quarterly estimated taxes are paid on time

7. Monitor Key Financial Metrics

Bookkeeping isn’t just about compliance. It’s a powerful tool for decision-making. Track metrics like:

·       Accounts receivable turnover (how quickly you’re getting paid)

·       Profit margins by service type

·       Monthly cash flow trends

These numbers can help you identify areas to cut costs, increase revenue, or improve efficiency.

Conclusion

Medical professionals who take control of their own bookkeeping gain more than just accurate records. They gain insight into the financial health of their practice. With the right tools, habits, and a bit of discipline, you can keep your finances just as well managed as your patient care.

Is your business where you want it to be? If not, as always, you can contact me for a free consultation.

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