Bookkeeping and tax for medical businesses • Personal tax returns for individuals

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How should my books handle Medicare and insurance money that arrives months late?

When you provide a skilled visit today but Medicare pays sixty days later, and your commercial payers each follow their own schedules, your books need a system that tracks the gap. Otherwise you end up managing the business by watching your bank balance and hoping the next deposit arrives before payroll.

The core issue is that revenue is earned at the time of the visit. The patient received care, the clinician documented it, and your agency now has a right to payment. But the cash shows up on payer timelines that can stretch weeks or months, and it often arrives with adjustments, partial payments, or denials that differ from what you billed.

Your books should answer three questions at any point in time. What has been earned? What has been collected? What remains outstanding, and from whom?

This means maintaining accounts receivable by payer. When visits are completed and billed, those amounts get recorded as revenue earned and receivables due. When remittances arrive, they need to be matched against the corresponding claims. The difference between what was billed and what was paid gets recorded so your receivable balances stay accurate. That difference might come from contractual adjustments, denials, or write-offs, and each one needs to be handled correctly.

The reconciliation against remittances is where the real bookkeeping work happens. Each ERA or EOB shows what the payer actually paid and why. Recording these correctly means your books reflect collected revenue, adjusted revenue, and the amounts still aging in receivables. Without this discipline, your accounts receivable balance drifts away from reality and you lose visibility into what money is actually coming.

Payer mix matters too. Medicare, Medicaid, and commercial payers each have different payment cycles and adjustment patterns. Breaking out receivables by payer lets you see where collection is lagging and which payers are creating problems. Bookkeeping for medical businesses that bill insurance has to account for this reality, or the numbers become meaningless.

The bookkeeping work here is separate from clinical billing and coding. Your billing staff or billing company submits claims and manages the clinical documentation. The bookkeeping function takes the remittance data and keeps the financial records accurate, recording what was paid, what was adjusted, and what remains outstanding.

For home health agencies and therapy practices, this kind of payer-lag bookkeeping is essential to understanding actual financial performance. A busy month of visits does not mean a profitable month until the payments actually arrive and the adjustments are recorded.

If your current books do not give you this visibility, or if you are effectively running the business by watching your bank account between deposits, a cleaner system would help. Reach out to schedule a consultation.

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More Questions

How much can my business put into retirement for me in 2026?

For 2026, a solo 401(k) allows contributions up to $72,000 if you're under 50, $80,000 if you're 50 or older, and $83,250 for ages 60 to 63. A SEP IRA caps at $72,000 but requires much higher income to reach that level.

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Insurance pays my therapy practice months after the session. How do books stay honest through that?

Track billed, expected (after contractual adjustments), and collected amounts as separate numbers. Age receivables by payer and reconcile your practice system to the bank monthly. This reveals which payers quietly hurt your practice through lag and denials.

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I financed a $120,000 device. How does it hit my taxes and my cash?

You can likely deduct most or all of the device cost in year one even though you financed it, thanks to Section 179 and bonus depreciation. But your monthly payments continue for years regardless of that deduction, creating a mismatch between your tax bill and your cash flow.

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I am a mobile therapist working out of my car. Do I even need real bookkeeping?

Yes, but scaled to your operation. Simple books that capture per-visit revenue, mileage documented the way the IRS requires, and quarterly estimates handled. Small operations lose the most to missed vehicle deductions and April surprises.

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What changed with 1099 rules, and what do I file this January?

The $2,000 reporting threshold applies to payments made in 2026, not 2025. This January, you still file 1099s for contractors who received $600 or more. The first filings under the new threshold happen in January 2027.

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Does the QBI deduction still exist, and do I qualify?

Yes, the 20 percent qualified business income deduction is now permanent. But healthcare businesses are classified as specified service trades, which means income thresholds determine whether you can claim it.

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Hunter Green CPA provides bookkeeping, tax preparation, and tax strategy for medical business owners across the United States. Alongside its business services, the firm prepares personal tax returns for individuals and families. Based in Oak Park, Illinois and led by Mason Hunter, a CPA with 10 years of tax experience and a background in corporate tax management.

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