Bookkeeping for medical billing companies
A billing company is often paid a percentage of what it collects, and may handle client funds in transit. Keep your fees, client collections held for others and staff costs apart so your own results are clear.
Best for: Independent medical billing and revenue cycle companies serving practices.
Reviewed
Fee income
Reviewed
Client funds in transit
Reviewed
Software costs
Reviewed
Staff costs
Where medical billing company books usually go wrong
- Client collections recorded as company revenue when only the fee is yours.
- Fees on percentage agreements calculated by hand, so rates drift between clients.
- Client funds in transit left unreconciled between collection and remittance.
- Software and clearinghouse costs spread evenly instead of by client.
- Staff time not tied to clients, so profitability by account is unknown.
- Fee adjustments made verbally and never recorded, so invoices and agreements drift.
- Client collections held for others mixed with the company's own funds.
What the books need to show
Industry-specific accounts and categorization, with the reporting scope agreed before work starts.
Percentage fee income
Record fees by client from collection reports.
Client funds in transit
Keep money collected for a client apart from your own revenue.
Clearinghouse and software
Track clearinghouse and billing software costs per client where possible.
Staff and contractors
Record billers and coders by cost, with payroll in the payroll system.
Client invoices
Keep aging by client for fees not yet paid.
Adjustments
Link refunds and fee adjustments to the original client month.
Reports a billing company can use
- Fee income by client against collections.
- Client funds held and released.
- Receivable aging for unpaid fees.
- Software and staff cost by client where possible.
- Fee adjustment log by client.
- Collections held for clients versus fees earned.
A simple, predictable process
From kickoff to your first clean close, here is exactly what happens.
Read client agreements
We review each client's fee terms and how collected money moves.
Separate your fees from client funds
Client money sits in its own accounts, with your accountant confirming treatment.
Reconcile collections to fees
Each month's collection reports are matched to fee invoices.
Close and review accounts
Statements arrive with client fund balances and unpaid fees listed.
Illustrative example
A client's insurance payment passes through the billing company before the fee is taken. Treating the remainder as a client balance prevents revenue overstatement. This is an illustration of the method, not a customer case or a guarantee.
Medical Billing Companies bookkeeping — your questions
Is collected money revenue?
Only your fee is. The rest belongs to the client. Confirm with your accountant.
How do I measure client profitability?
Tag software and staff time by client where records allow.
Do you see patient data?
Bookkeeping needs totals. Share only what is needed and confirm requirements with your compliance advisor.
Can you track fees by percentage?
Yes, by client agreement.
Do you see claim-level data?
No. Totals by client are enough for bookkeeping.
How are minimum monthly fees handled?
They are recorded separately from percentage fees so each is measured.
Can you handle onboarding fees?
Yes. One-time fees get their own income line.
How do you keep client money separate?
Funds collected for clients are tracked as a liability until paid out.
Can you track fees by client?
Yes. Fees are tied to each client contract.
What affects the bookkeeping quote for medical billing companies?
Plans start at $229/mo. Transaction volume, account count and the records and reporting needed determine the agreed scope and final quote. Catch-up work is discussed separately.
Explore other industries
Medical Practices
Insurance remittances, patient balances, provider compensation, supplies and equipment kept clear each month.
Learn more →Collection Agencies
Trust money and fee revenue kept on opposite sides of the wall, client remittances reconciled and every collector's production visible.
Learn more →Customers slow to pay?
Our in-house collections team calls and emails customers who owe your company money, so you can stay focused on the work.