When it comes to bookkeeping, you want to make sure everything is correct and up-to-date. This can be especially difficult if you’re just establishing your own medical practice.

Decide on an accounting method 

There are two types of accounting to choose from.

Accrual accounting

Accrual accounting is a common form of bookkeeping in the medical industry. Through this method, you will account for all of your expenses the moment you receive a bill for them. On the same note, you will account for any receivable from your patients when you bill them rather than when they make a payment. 

Although this method of accounting is a common bookkeeping practice for private practices, it’s not always the preferred method. Many prefer to use cash-basis accounting. 

Cash basis accounting

The cash basis accounting method is similar to the accrual accounting method; only receivables and billables are logged upon payment, not receivables. The majority of physician-owned medical practices prefer this method because it provides the most up-to-date view of their businesses. 

For this method, it’s vital to prepare for large quarterly expenses, such as malpractice insurance. Hidden costs can sneak up on you with cash-basis accounting if you do not plan ahead.