Medical practice
Medical practice bookkeeping checklist
A medical practice collects money from patients, insurers and government programs, and each source reports it differently. The monthly request should collect the practice management reports, the payer remittances, the patient payments, the payroll and the vendor invoices. Reconcile the deposits to the practice management system before the revenue is recorded.
Who sends itSent by the practice's bookkeeper after the month ends, usually by the 10th. It covers every provider, location and payer the practice works with.
0 of 17 ticked
01Revenue and receivables
02Payroll and providers
03Costs and inventory
04Banking and compliance
What firms get wrong
- Recording the insurance payment as revenue without the contractual adjustment, so the practice looks underpaid.
- Matching a batch of patient payments to the bank without the practice management deposit report.
- Missing the W-9 for a locum or contract provider until the 1099 deadline.
- Treating a provider draw as payroll when it is actually a distribution or guaranteed payment.
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Questions about this checklist
What records does a medical practice need each month?
The practice management summary, payer remittances, patient payments, accounts receivable aging, payroll and provider compensation, vendor invoices and bank statements. The practice management report is the source for charges and adjustments.
How do I record insurance payments?
Record the gross charges, the contractual adjustment and the payer payment separately. The net collection is not the same as the charge, and the adjustment is the difference the practice agreed to accept.
Do contract providers get a 1099?
A payment to an unincorporated contract provider for services is generally reported on Form 1099-NEC when it reaches the threshold. Collect a W-9 before the first payment and check the payee's entity type.
Are medical services subject to sales tax?
Many states exempt medical services but tax retail products, supplies or supplements. The rule depends on the state and on what was sold, so review the practice's product sales with the client.
Sources
- IRS: Publication 334, Tax Guide for Small Business
- IRS: Instructions for Forms 1099-NEC and 1099-MISC
- HHS: HIPAA Privacy Rule
Checked November 3, 2026. Tax rules, forms and thresholds change; confirm them with the IRS or your tax software before relying on them.
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