Dialysis and nephrology groups almost always involve multiple entities. You might have separate LLCs for each clinic location, a management company, professional services entities for physician compensation, and possibly real estate holdings for the buildings. Each one of those needs its own books. Mixing them together creates a compliance problem and makes it impossible to understand which locations are profitable and which are dragging down the group.

The foundation is a standardized chart of accounts across every entity. If one location codes dialysis supplies under “Medical Supplies” and another puts them under “Clinical Expenses,” you can’t compare performance across clinics. Every location should use the same account structure so that when you pull a P&L for Location A next to Location B, you’re looking at apples to apples. Revenue categories should break out by payer type (Medicare, Medicaid, commercial insurance, self-pay) since reimbursement rates vary and payer mix affects profitability at each site.

Location-based profit and loss reporting is not optional. Each clinic has its own direct costs: staffing, supplies, rent or occupancy, equipment maintenance, and utilities. These are straightforward to track because they belong to that location. The financial statements for each site should clearly show revenue minus direct costs to give you a gross margin before any shared cost allocations come into the picture.

Shared costs are where things get complicated. Administrative staff, the billing department, EMR system licenses, group insurance policies, legal fees, and management company overhead all benefit multiple locations. You need a documented allocation methodology for each category of shared expense. Common approaches include allocating based on revenue percentage, patient volume, headcount, or square footage depending on what makes the most sense for the expense type. The key word is “documented.” If you’re ever audited or if partners dispute distributions, your allocation method needs to be written down, consistently applied, and defensible.

Intercompany transactions require careful tracking as well. If a management company charges each clinic a management fee, those transactions need to show up properly on both sets of books. If one entity pays a bill on behalf of another, there should be an intercompany receivable and payable that gets reconciled regularly. Letting intercompany balances pile up without reconciliation creates a mess that’s expensive to untangle later.

Equipment depreciation deserves specific attention in dialysis operations. Dialysis machines, water treatment systems, and clinical equipment represent significant capital investments at each location. Each asset needs to be tracked to its specific location with its own depreciation schedule. When equipment gets moved between clinics or replaced, the books need to reflect that transfer or disposal accurately.

Running full-service bookkeeping for a multi-entity healthcare group is not the same as keeping books for a single-location practice. The volume of transactions, the intercompany complexity, and the compliance requirements all scale up significantly. Monthly close procedures should include reconciling every bank account and intercompany balance across all entities, producing location-level financials, and reviewing cost allocations for reasonableness.

If your books are currently combined or your locations don’t have clean P&L statements, getting that fixed sooner rather than later will save you real headaches. Our Orange County small business bookkeeping services include multi-entity healthcare accounting, and Amrit Sarker currently manages the books for 11 separate entities within a nephrology and dialysis group. That hands-on experience with the exact structure and challenges dialysis practices face means your books get set up correctly from the start.