Top 5 QuickBooks Tips for Medical Practices

How do you use QuickBooks at your medical practice? Are you getting the most out of it?

My colleague, Meredith Tucker, CPA, is a Certified QuickBooks ProAdvisor and entrepreneurial services manager who works with businesses, including medical practices, on financial reporting and analysis, tax planning and compliance. She offered a few tips that can help medical practices use QuickBooks more effectively and efficiently to manage their financial data.

1. Use bank and credit card feeds

Using the online banking feature to import bank and credit card transactions in QuickBooks can nearly eliminate the need for manual data entry and provide more time to analyze results versus keypunching transactions. Bank and credit card feeds are easy to set up, and they can help you classify and manage transactions. You can organize your data using automatic rule setup and batch transaction management.

2. Reconcile monthly

Reconciling your bank and credit card accounts in QuickBooks on a monthly basis will help you maintain the data integrity of your books and avoid a major year-end clean-up. You can catch and correct common errors, such as improperly posted or forgotten charges, as the year progresses instead of waiting until December.

To use the credit card reconciliation feature in QuickBooks, go to the “Banking” drop-down menu at the top of your screen and select the “Reconcile” option (as with bank reconciliations). Your credit card accounts have registers available where all charges and payments can be entered.

3. Build a management dashboard

Work with your accountant to build a monthly management dashboard to help you track key performance indicators (KPIs) for your medical practice. Tracking and reporting key data on a regular basis can be critical to helping your practice grow and thrive.

The data should include KPIs from QuickBooks financial reports, such as overhead expenses, operating and total margins, and outstanding A/R, which is an important indicator of cash flow. The dashboard should also include KPIs from your practice management system, such as patient counts, number of procedures and denied claims.

4. Use “classes” or “locations” for financial reporting

Consider using “classes” or “locations” to help manage costs and track performance of a practice with multiple locations. For example, you may want to track revenue by each location to determine its profitability. Classes can also be used to track performance of different service lines, which can be helpful for practices with multiple specialties. You can use classes for any meaningful breakdown of your business that you want to see reporting for.

To set up a class in QuickBooks Online or the desktop version, click the “Company Preferences” tab and select “Use Class Tracking.” Now you are ready to add classes using the list function. Please note that every transaction in QuickBooks (e.g., entering a bill, entering an invoice) will now prompt you for a class, so don’t forget to enter one or that transaction will go to the class “Unassigned.

5. Consider upgrading to QuickBooks Online

Business owners in many industries, from healthcare to financial services, are making the switch to the cloud by housing their financial data online. Moving to QuickBooks Online can bring better efficiency and accessibility as well as the convenience of automatic upgrades and backups.

If it’s a good fit for your practice, QuickBooks Online can provide real-time, on-the-go access and collaboration for you as the business owner as well as for your accounting professional and bookkeeper. Having secure, yet easily accessible shared data means the days of sending backup files are over; everyone can work from the same, constantly updated set of clean data.

Speak to your Certified QuickBooks ProAdvisor to learn more about how you can better use QuickBooks for your medical practice.