Chart of Accounts for Doctors and Other Medical Services

And when an analysis uncovers any statistics that vary significantly from the budget, this person should carefully explain the findings to the physicians. To protect against embezzlement, another staff member, physician or CPA should also occasionally spot-check the work of the person preparing the variance reports. Make sure you have a separate business bank account and business credit card for the practice, and keep all business and personal expenses separate. Our team is ready to learn about your business and guide you to the right solution. We offer a free PDF download of a QuickBooks chart of accounts for doctors, dentists, and other medical professionals. Nick Gallo is a Certified Public Accountant and content marketer for the financial industry.

Analyzing Your Organization’s Structure

So, use the templates we covered above, along with the step-by-step instructions, and create your chart of accounts (or improve medical practice accounting your existing one). The revenue section of a chart of accounts is a place that is often lacking for helpful insights. Below, we’ll take you through 3 basic steps and provide multiple examples and templates that will give you a better idea of how to put together your own chart of accounts.

Taking the Guesswork Out of The Chart of Accounts for Medical Practices

Now that you know why a chart of accounts is important let’s jump into steps for building one. These reports are the bread and butter of good accounting and a gateway to insights into your business’s health. And if it’s your first time building one, towards the end of this guide, we’ve got multiple chart of account income statement examples you can take with you and use as a template for creating your own. National benchmark statistics on practice overhead can be used to easily create and modify your budget in minutes. Creating and maintaining a practice budget can bring a little extra discipline to your business habits, resulting in a healthier practice with fewer problems. If you have partners in your medical practice, you need to determine how to split income.

Free Course: Understanding Financial Statements

Nonprofits face unique accounting challenges due to their focus on accountability and donor restrictions. An effective chart of accounts is crucial for accurate reporting and strategic decision-making. Your medical practice’s accounting professional will also help you calculate important financial information like your practice’s breakeven point. They will also help you analyze fixed and variable expenses on your income statement.

• That last one is important because you might run out of account numbers for a category without enough empty account spaces.
• Now that we’ve gone over how to generate a simple chart of accounts let’s look at some examples in action.
• If you block out 1000 account numbers for a particular category, you give yourself enough room to grow in a way that your accounts don’t ever become disorganized and need restructuring (which is a big pain).
• Once you have an administrative staff in place, it’s a good idea to invest in their financial education as well.
• Many medical practices turn to professionals in medical practice accounting for expert assistance with the financial side of their business.

This can be used if you’re an owner or property manager, with some minor tweaks for each. Large corporations often have ledgers with thousands Bookstime of accounts spanning across multiple subsidiaries. That last one is important because you might run out of account numbers for a category without enough empty account spaces.

• The cash basis of accounting involves recognizing revenues when you receive them and expenses when you pay them.
• The practice’s chart of accounts is the basis for all accounting information recorded in its financial records.
• Also, keep in mind that this example doubles as a template you can use to flesh out your own chart of accounts.
• Owning your own medical practice is an exciting prospect, but it comes with additional accounting responsibilities.
• By creating a straightforward Chart of Accounts,  any health and wellness owner can take control of their business finances and, more importantly, their peace of mind.
• Liquidity refers to your practice’s ability to settle its short-term liabilities on time and without difficulty.

The Uniform Prudent Management of Institutional Funds Act (UPMIFA) provides guidance for managing and investing funds, emphasizing prudent decision-making. Nonprofits must analyze fund restrictions to align financial strategies with organizational goals, often requiring investment policies that reflect risk tolerance and liquidity needs. Over time, this will allow you to maximize profitability by gaining insights into your product cost and sales. That’s because many drop-in “sales” and “cost of goods sold” as separate accounts and call it a day.