QuickBooks For Doctors

Doctors juggle multiple responsibilities, from being an advocate for their patients, a consoling family members,  to being a business owner. It is very easy to put off seemingly less important tasks like bookkeeping or use sub-par methods to track finances. 

This post will give an overview how a doctor or a small medical practice would use QuickBooks Pro 2013 to manage the finances and employees.

QuickBooks Premier professional services might sound like the right choice for your practice, and you may need it later down the road if you would like in-depth reports specifically geared toward businesses that offer professional services; however, many practices will do just fine using Pro for their financial software. 

Let me point out one many thing, do not use QuickBooks for insurance billing. Most doctors have specialized software that will handle the codes and the billing, it might sound odd having two programs that are able to track receivables, but QuickBooks just isn't the right solution for medical billing.

What you would use QuickBooks for is to record the deposit, checks that are written, manage payroll, and run financial reports at the end of the year for tax purposes. You could uses QuickBooks to track individuals who pay with cash for services (which might benefit the doctor office and the patient). 

If you have a small payroll, you could easily get started with Basic payroll for $20 per month and $2 per employee. The $2 fee cover direct deposit, so there is no need to write manual payroll checks. Basic payroll means you still have to pay and file your own taxes at the end of the year, but QuickBooks has plenty of reports that will help you.

If you decide to not go that route, I would suggest full service payroll. It cost $79 per month and $2 per employee. With his service you only need to enter the hours in QuickBooks. Intuit will handle calculating the taxes and paying the payroll taxes. All you need to do is make sure there is an account for them to withdraw the funds. If there are any problems with your filing, Intuit speaks on your behalf. If there are any penalties because of errors, Intuit pays them, not you.

There are numerous benefits using QuickBooks to manage your company's financial information and I hope this post shows some of the reasons why any medical office should use QuickBooks.

If you have any questions, please leave a comment!

How to Use the Collection Center in QuickBooks

Managing A/R can become an overwhelming experience. The difficulty is further compounded when a company’s A/R is tracked manually or through spreadsheets. The process of tracking printed invoices, updating aging reports, tracking down customer contact information, and the managing call logs and emailings, waste time and increases labor cost.

QuickBooks Enterprise offers a simple and effective solution to this problem. The solution is often overlooked Collection Center. To access this helpful resource, click on the customer center, then click on the Collection Center icon.Once the new window opens you’ll see the company’s outstanding A/R accounts appear in a table. The columns can be sorted (except for the contact column). All overdue invoices are grouped by customer.

The red numbers represent the total amount past due. The overdue shows the days the invoice is behind, contact would have the point-of-contacts name, and finally notes and warnings. How QuickBooks calculates how the past due days depends on your company’s preferences under the reminders list. QuickBooks will notify you of invoices that are 5 days past the due date, and 15 days before the due date. Invoices that are below 5 days will not show up in this list, but under the almost due (it will be positive number, negative numbers are bills not yet do).


At this screen the bulk of your collection activities will revolve around using notes/warnings. Warnings is a envelope with an exclamation mark. What this represents is that the current customer does not have any email address in the system. QuickBooks uses email to send statements, collection letters, and invoices to customers. Once you fill in an email, this mark will go away. You then get an option to select and send email. At this point you are able to draft up a unique email for the customer, along with the invoices that are past due.


The final aspect of the collection center is the notes. This is just a timestamped notepad that records every time you open the notes. This is a great way to track conversations, promises, insults, or any other useful information. Whenever you speak with a customer, you should always focus on writing everything down.


The collection center is a great way to track outstanding A/R balances. Proper use and solid company policies will keep cash flow up and overdue balances low. The collection center, however, will not remind you to contact people with overdue balances. You have to check this every few times a week to maintain on top of A/R.

How To Track Equipment Rentals In Quickbooks

Some companies expand their revenue streams by renting out equipment to others. As some business owners may have found out, tracking of rentals and properly accounting for the money they generate is a tedious task. The goal is to show you two ways to track rentals using QuickBooks and QuickBooks Point of Sale.

QuickBooks Only Method

QuickBooks does not have a specific area or tool that allows you to track rentals; however, do not let this stop you.

1. Identify all the equipment you will rent out.
2. Enter the equipment as non-inventory items in QuickBooks
3. Setup the individual equipment names as Other Names
4. Use timesheets to track the rental/reservations
5. Mark the time entries as billable and then create an invoice for billable expenses.

QuickBooks Point of Sale Method

Using QuickBooks POS to track rentals is a lot easier than using QuickBooks. QuickBooks Point of Sale is able to use deposits and set up specific items and fees that can be adjusted on the fly instead of QuickBooks.

1. Identify the equipment you will rent out.
2. Create an inventory item for the equipment.
3. Set the cost to zero, the price to zero, and the quantity to the number of units you have to rent out.
4. Create a non-inventory item named Deposit on Equipment make the price zero
5. Repeat the process above but name the item Rental Fee.
6. When a customer rents the item, create a receipt with the inventory item on the first line of the sales receipt.
7. On the same receipt, Deposit on Equipment item will be the next item you add. The inventory item (the rental) will be 0 dollars, while the Deposit on Equipment will have the amount you are charging for the deposit.
8. Record the receipt, take the payment using standard payment methods.
9. Track the equipment using either a spreadsheet or another process.
10. When the item is returned, locate the receipt and reverse it. This will create a refund for the customer. If the deposit was done using a credit card, the card will be automatically refunded. This process places the rented item back into inventory.
11. Create a new receipt using the non-inventory item Rental Fee and enter the amount for the rental charge.

It may be wise to track rental equipment as a fixed asset in QuickBooks so you can depreciate it for tax purposes. Please speak with your accountant about this.

How to Control Spending

One of the key areas of controlling your finances is to control expenses. To many, this might be a very obvious point, but in reality it is much harder to do. We all know that the less you spend the more you can save, but do we really apply that advice? How many of us can put off instant gratification so we can save?

The problem boils down to psychology. Our present selves view our future selves as complete strangers. Because of this, we tend not to take our futures too seriously. We do things and expect our future selves to fix the problem. Sound familiar  Take diets and exercise. We choose to eat poorly and not exercise, we gain weight. We know we should exercise and reduce the amount we eat, we know that if we don't we will develop health problems, but we can do it later. We wholeheartedly expect that our future selves will fix the problems. The failure of this method, this thought, is that we are the future selves, and eventually (as will all people) we won't have a future self that will fix the problem. 

To go back to my point, how do we control spending? The easiest way to do it is to track spending. Record every time you spend money. This sounds very tedious, but it is illuminating. Do this for one week, and you will be amazed on what you spend. Many times, we swipe our cards and not thinking about it. These purchases, the ones we do without thinking, cost us the most. The goal of this exercise is to make us conscious of our spending. 

After doing this for a few weeks one will become more aware of the flow of money. This is a key point of taking control of your money. YNAB helps, because unlike other software (Quicken and Mint) you have to manually enter each transaction. Quicken and Mint automatically categorizes your transactions. This means your daily routine of analysing your finances becomes nothing more than viewing graphs and making sure your software categorized everything correctly. 

One final method of controlling expenses is to use cash. Cash is finite. How hard is it for you to break a hundred dollar bill? You are more frugal when your wallet is filled with hundred dollar bills than with singles. You can visibly see your money deplete, and once it is gone you cannot spend more. If you combine this method with tracking your expenses (either using a spreadsheet, Quicken, Mint or YNAB) you will see an increase of funds within a month. My wife and I noticed an increase of $200.