Healthcare Providers

Medical practice accounting where insurance reimbursements arrive months after services and at amounts lower than billed.

The Industry

A dental office sees 40 patients this week and bills $85,000 to insurance. Blue Cross will pay $52,000 in 60 days after contractual adjustments. Aetna owes $18,000 from last month but hasn’t paid yet. Patient co-pays total $12,000 but half won’t ever be collected. The practice looks profitable on paper while the bank account stays tight because cash lags services by two to three months.

Healthcare revenue doesn’t work like other businesses. You provide care today but payment amount is uncertain and won’t arrive for months. Insurance companies negotiate rates lower than what you bill. Patients owe balances they may never pay. Your accounting needs to separate what you billed from what you’ll collect from when cash actually hits. Get this wrong and your financials become fiction that tells you nothing useful about practice health.

Who This Covers

Medical clinics, dental offices, chiropractic practices, optometry, mental health providers, physical therapy, home health agencies. Any healthcare practice in Phoenix billing insurance or managing patient accounts receivable.

The Core Issue

Services delivered now, payment later, amount uncertain. Insurance reimbursements lag by months and come in at contracted rates below billed amounts. Patient responsibility often goes uncollected. Medical supplies need inventory tracking for practices that stock them. Payroll for clinical staff with varying certifications and pay rates. Revenue recognition becomes complex fast.

What We Handle

Insurance receivables need aging by payer so you know which companies are slow and which claims need follow-up. Contractual adjustments reduce billed amounts to actual reimbursement rates. Recording the full billed amount as revenue when you know insurance will only pay 70% makes income look inflated until adjustments hit months later. Patient balances need separate tracking from insurance with realistic bad debt write-offs when collection becomes unlikely.

Practices with clinical staff need payroll that handles varying certifications and rates. Accounts receivable management tracks what’s owed and follows up on aging balances before they become uncollectible. Tax preparation for healthcare providers needs someone familiar with medical practice deductions, equipment depreciation, and continuing education expenses. Cash flow forecasting matters when payments lag services by 60 to 90 days.

Revenue and Receivables Management

Insurance claims tracked by payer with aging reports. Contractual adjustments recorded so revenue reflects expected collections, not inflated billing amounts. Patient balances separated from insurance with bad debt recognized appropriately. Accounts receivable services available for practices that need systematic follow-up on aging balances.

Payroll and Tax Strategy

Payroll processing for clinical staff with proper certification tracking and varying pay rates. Tax preparation that captures equipment purchases, continuing education, and healthcare-specific deductions. Quarterly estimates set based on actual collections, not billed amounts, so April doesn’t bring surprise tax bills you can’t pay.

What Goes Wrong

Recording full billed amounts as revenue creates inflated income that disappears when contractual adjustments come through. A practice bills $200,000 in March, records it as revenue, then writes down $60,000 in May when insurance actually pays. The March numbers looked great but were never real. Patient balances that will never be collected sit in receivables for years making your balance sheet show assets that don’t exist.

Cash flow becomes unpredictable when you don’t track payer timing. Some insurance companies pay in 30 days, others take 90. Without knowing which claims are with which payers, you can’t forecast when cash will arrive. Payroll hits every two weeks regardless of whether insurance payments came through. The gap between providing care and collecting payment creates constant cash tension.

Revenue Timing Creates Fiction

Billing amounts recorded as revenue when you know actual reimbursement will be 30-40% lower. Adjustments come months later making financials swing unpredictably. You can’t see real practice performance when revenue numbers don’t match economic reality.

Collections Fall Through Cracks

Patient balances and slow-paying insurance claims don’t get systematic follow-up. Money gets left on the table because nobody’s managing the aging receivables consistently. Cash flow stays tighter than it should be because collection rates are lower than they could be with proper follow-up.

What Changes

Revenue gets recorded at expected reimbursement rates, not billed amounts. Your P&L shows what you’ll actually collect. Contractual adjustments happen immediately instead of months later as surprise write-downs. Patient balances get aged and written off appropriately so your receivables reflect money you’ll likely collect, not everything you’ve ever billed that’s still sitting there years later.

Insurance claims get tracked by payer with aging reports showing what’s outstanding and how long it’s been pending. Systematic follow-up improves collection rates. Cash flow forecasting accounts for payment timing by insurance company so you know when money will be tight. Payroll processes smoothly for clinical staff. Tax prep captures healthcare-specific deductions without creating audit risk.

Realistic Financial Picture

Net revenue after adjustments shows actual collections. Receivables cleaned regularly with uncollectible amounts written off on schedule. Your balance sheet and P&L reflect economic reality instead of optimistic billing amounts you’ll never collect.

Better Cash Flow and Collections

Payer analysis shows which insurance contracts reimburse well and which barely cover costs. Aging receivables get systematic follow-up improving collection rates. Cash forecasting accounts for payment timing patterns so you can plan for tight periods instead of being surprised.

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