Questions
Straightforward answers to the bookkeeping, payroll, and accounting questions that come up when you're running a business.
How do I set up bookkeeping for a medical practice with multiple LLCs and entities?
Each entity needs its own QuickBooks file with a consistent chart of accounts across all of them. Intercompany transactions like management fees, shared staff costs, and rent between entities must be tracked carefully and eliminated when you pull consolidated reports.
Read answerWhat is the best way to track intercompany transactions between healthcare entities in QuickBooks?
Set up Due To and Due From accounts in each entity's QuickBooks file to log every payment made on behalf of another entity. QuickBooks Online lacks built-in intercompany elimination, so you'll need manual journal entries and monthly reconciliation between entities.
Read answerDo I need separate QuickBooks files for each medical entity or can I use class tracking?
For healthcare groups with distinct legal entities like LLCs and professional corporations, separate QuickBooks Online files are generally the better choice. Class tracking in a single file can work for two or three entities but creates problems as you grow.
Read answerHow should a nephrology or dialysis practice handle bookkeeping for multiple clinic locations?
Each clinic location needs its own set of books with a standardized chart of accounts so you can produce location-level P&L reports. Shared costs like admin, billing staff, and EMR systems require documented allocation methods that hold up under audit.
Read answerWhat bookkeeping challenges are unique to medical practices compared to other small businesses?
Insurance reimbursement lag, the gap between charges and collections, and the cash vs. accrual accounting decision create bookkeeping complexity that most small businesses never deal with. Medical practices also face provider compensation tracking, regulatory compliance costs, and multi-entity structures.
Read answerHow do I reconcile insurance reimbursements with patient charges in QuickBooks?
Record every service at the full billed amount, then post insurance payments alongside contractual adjustment line items. Tracking the gap between charges and collections gives you your net collection rate, which is one of the most important financial health indicators for any medical practice.
Read answerIs QuickBooks Online HIPAA compliant for medical practice bookkeeping?
No. QuickBooks Online is not HIPAA compliant and Intuit does not sign Business Associate Agreements. Medical practices can still use QBO for bookkeeping, but only summary financial data should go in. Patient health information belongs in your practice management or EHR system.
Read answerWhat chart of accounts should a dental or medical practice use in QuickBooks?
Medical and dental practices need a chart of accounts with revenue split by provider or service line, insurance versus self-pay income, and expense categories for supplies, malpractice insurance, equipment leases, and EHR subscriptions. The standard QuickBooks template doesn't include these.
Read answerHow do I track provider compensation and draws for a multi-physician practice?
Set up separate sub-accounts for each provider in your chart of accounts, and distinguish between W-2 salary payments that flow through payroll and owner draws that come from equity. Reconcile everything against employment or partnership agreements at least quarterly.
Read answerHow should a medical practice allocate shared overhead costs across multiple locations?
Pick an allocation method that reflects how each location actually drives the cost. Revenue-based, patient volume, headcount, and square footage are the most common approaches. The method you choose matters less than documenting it and applying it consistently.
Read answerWhat financial reports should a healthcare practice owner review monthly?
Focus on your P&L by location and provider, A/R aging for both insurance and patient balances, net collection rate, overhead ratio, and cash flow statement. These reports together tell you whether your practice is financially healthy or heading toward trouble.
Read answerHow do I handle equipment depreciation for medical devices and clinical equipment?
Medical devices and clinical equipment are capitalized as fixed assets and depreciated over their useful life rather than expensed in one year. Most equipment falls into 5 to 7 year recovery periods, though Section 179 and bonus depreciation can accelerate the deduction. Proper tracking with serial numbers and a fixed asset register is essential for audits and insurance.
Read answerCan a bookkeeper help with financial reporting for healthcare practice acquisitions?
A bookkeeper maintains the clean financial records that buyers, CPAs, and advisors depend on during due diligence. Messy books can delay closings, reduce purchase prices, or kill deals entirely.
Read answerHow do I separate personal and business expenses when a doctor owns the practice building?
The standard approach is to hold the building in a separate LLC from the medical practice. The practice pays fair market rent to the property LLC, and both entities maintain completely separate books.
Read answerWhat bookkeeping records does a medical practice need for a bank loan or line of credit?
Banks will ask for 2-3 years of financial statements, current year-to-date financials, an A/R aging report, a debt schedule, tax returns, and personal financial statements of guarantors. Your monthly bookkeeping must be current or the application stalls.
Read answerHow do I set up inventory accounting in QuickBooks for a wholesale distribution business?
Enable inventory tracking in QuickBooks Online, set up products with accurate costs, and organize by category or product line. Most wholesalers with hundreds of SKUs will need a third-party inventory app that syncs with QBO to handle landed costs, reorder points, and real reporting.
Read answerWhat is landed cost and how do I track it for imported goods?
Landed cost is the total cost of getting a product to your warehouse, including freight, duties, insurance, and handling fees. For accurate COGS, all of these costs must be allocated to inventory rather than expensed separately.
Read answerHow should a wholesale company handle inventory valuation in QuickBooks?
QuickBooks Online uses FIFO by default, which works well for most wholesale distributors. The bigger challenge is keeping your book inventory accurate through regular physical counts and variance reporting.
Read answerDo I need a bookkeeper if I run a small import and distribution business?
Yes. Import and distribution businesses deal with landed costs, 3-way matching, inventory valuation, and cash flow timing that make accurate bookkeeping essential even at a small scale.
Read answerHow do I track purchase orders and vendor payments for a wholesale business?
Use QuickBooks Online to create purchase orders, receive inventory, and match vendor bills. Track PO status, vendor payment terms, and early payment discounts. Run A/P aging reports regularly because large orders can tie up cash for 60 to 90 days before you sell through.
Read answerWhat are the bookkeeping requirements for importing goods into California?
California importers need to track customs duties by harmonized tariff code, pay use tax on goods when sales tax wasn't collected at entry, file with the CDTFA, and maintain resale certificate files if selling wholesale. Getting any of these wrong creates audit exposure.
Read answerHow do I account for damaged or returned inventory in my wholesale business?
Damaged inventory gets written down or written off by debiting COGS or a loss account and crediting inventory. Customer returns go back into inventory if resalable or get written off if not. Tracking return rates by product and customer helps you catch quality and shipping problems early.
Read answerHow does sales tax work for wholesale transactions in California?
Wholesale sales to resellers are generally exempt from California sales tax, but only if the buyer provides a valid resale certificate. Without that certificate on file, you as the seller owe the tax.
Read answerHow do I manage cash flow when inventory purchases are large and payment terms are long?
The gap between paying vendors and collecting from customers can stretch 60 to 120 days for wholesale businesses. Shortening that cycle requires tracking inventory turnover, negotiating terms on both sides, and forecasting cash flow weekly.
Read answerWhat financial metrics should a wholesale distributor track monthly?
Start with gross margin by product line, inventory turnover, and cash conversion cycle. Add days sales outstanding, days payable outstanding, fill rate, and return rate for a complete picture. Together these metrics show where cash gets stuck and where margin leaks.
Read answerHow do I handle multi-currency transactions for an import business in QuickBooks?
Enable multi-currency in QuickBooks Online, then record vendor bills in the supplier's currency. QBO converts at the exchange rate on the transaction date and recognizes gains or losses when you make the actual payment.
Read answerHow do I set up a chart of accounts for a wholesale distribution company?
A wholesale chart of accounts needs revenue and COGS broken out by product line so you can analyze margins. Structure inventory as an asset, separate inbound freight and duties from product cost, and track warehouse and delivery expenses on their own.
Read answerHow do I track food costs and calculate food cost percentage for my restaurant?
Food cost percentage equals beginning inventory plus purchases minus ending inventory, divided by food sales. Most restaurants should target 28% to 35%. Track it weekly so you catch problems before they eat into your margins.
Read answerWhy is QuickBooks not ideal for restaurant-specific bookkeeping and what are the alternatives?
QuickBooks Online is a solid general ledger but lacks restaurant-specific features like menu item costing, food cost tracking, tip reporting, and POS-level sales analysis. Most restaurants pair QBO with specialized restaurant management software to fill those gaps.
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