Do your Practice Management recorded deposits match your Quickbooks?
As a dental practice owner, you already know how important it is to have accurate and timely financial records. One of the most critical but often confusing tasks is reconciling deposits from your practice management software with QuickBooks Online (QBO). This process can be complex due to the different ways payments are received and deposited, such as through remote deposits, credit card merchants, financing companies, and electronic transfers from insurances. In this article, we’ll walk you through the steps to reconcile each type of deposit effectively, ensuring your financials are accurate.
The first step would be to have your deposits in QBO classified by the type of deposit, such as remote, credit card merchant, financing companies, electronic transfers for insurance, etc….Once that is completed, then you can reconcile these to your practice management software using deposit reports and double checking with statements from the merchant and financing companies.
1. Remote Deposits
Remote deposits refer to checks that are scanned and deposited directly into your bank account, often bypassing a physical visit to the bank.
Steps to Reconcile:
Ensure that the deposit recorded in your practice management software matches the bank deposit slip.
Compare the deposit slip with the bank statement to ensure all amounts are accurate.
In QBO, check that the classified deposits match the total of the remote deposit, using the same date as the bank deposit to avoid confusion.
Timing Tip: Sometimes, remote deposits may be delayed or post on a different day than expected. Always reconcile with the bank deposit slip rather than the day the practice management software recorded the payment.
2. Credit Card Merchant Deposits
Credit card payments are a common way for patients to settle their bills. However, reconciling these can be tricky because credit card merchants often deduct fees before depositing the funds into your bank account.
Steps to Reconcile:
First, check your merchant statement for the gross total (the total amount before fees are deducted).
Record the gross amount in your practice management software.
In QBO, enter the full deposit as a sales receipt or a deposit, and add a separate expense line for the fees deducted by the credit card merchant. This will ensure that your deposit matches the actual amount received in your bank account while accounting for the fees.
Timing Tip: Be mindful of when credit card batches are processed and when deposits actually hit your bank. Sometimes, there’s a lag that can affect reconciliation.
3. Financing Companies
For practices that offer patient financing through companies like CareCredit, reconciling these deposits can also be a bit complex due to fees being removed before the funds are deposited.
Steps to Reconcile:
Look at the financing company's statement to find both the gross amount of the payment and the fees deducted.
Record the gross amount as a deposit in your practice management software.
In QBO, record the gross payment, and like credit card deposits, enter a separate line item for the fees so that the final amount matches what was deposited in your bank account.
Timing Tip: Be sure to confirm the date the financing company made the deposit rather than when the payment was initially approved, as there can often be a delay.
4. Electronic Transfers from Insurance Companies
Insurance companies will often send payments via electronic transfers (EFT), but reconciling these can be confusing because they may post in the practice management software on a different day than when they hit the bank.
Steps to Reconcile:
Always wait until the funds have actually hit your bank before recording them in your practice management software.
When the deposit appears in your bank, record the payment in the practice management software to ensure the timing matches.
In QBO, check the date the deposit was received in your bank account and make sure all is accounted for.
Timing Tip: Many practice management software systems show that an insurance payment has been made based on the insurer’s notification, but always match this with the actual bank deposit to avoid discrepancies in timing.
General Advice for Reconciling Across All Payment Types
Reconciling the timing differences between deposits recorded in the practice management software and QBO can be challenging, but following these steps can make it easier:
Always cross-check with bank statements, merchant statements, and financing company reports to ensure accuracy.
Record fees deducted by credit card merchants or financing companies to ensure the net deposit matches what’s in your bank.
Avoid recording insurance payments before the money hits your bank to prevent timing issues.
By following these guidelines, you’ll ensure that your deposits are accurately reflected in both your practice management software and QBO, giving you a clearer picture of your practice’s financial health.
Regular reconciliation will help you catch any discrepancies early, making it easier to maintain clean, accurate financial records and reducing stress during tax season or audits.
This approach simplifies the reconciliation process and ensures that your books are always up to date, allowing you to focus more on patient care and less on administrative headaches!
To receive further information, we invite you to schedule a complimentary consultation using the link provided below.
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