Questions
Answers to questions small business owners ask about bookkeeping, accounting, and staying on top of their finances.
How much does medical billing cost for a small practice in Michigan?
Medical billing for small practices typically costs 4% to 10% of collected revenue. The exact percentage depends on your specialty, claim volume, and what services are included. Full-service billing should cover eligibility verification, claims submission, denial management, and AR follow-up.
Read answerWhat is the difference between medical billing and medical coding?
Medical coding translates diagnoses and procedures into standardized codes. Medical billing submits those codes as claims and handles collections. They work together in the revenue cycle, and mistakes in either function lead to lost revenue.
Read answerHow do I reduce claim denials at my medical practice?
Most claim denials are preventable with proper front-end processes. Focus on eligibility verification, prior authorization, accurate coding, and complete documentation to get claims paid the first time.
Read answerWhat should I look for when hiring a medical billing service?
Look for specialty-specific experience, HIPAA compliance, transparent reporting, and a clear denial management process. The right billing service should communicate regularly about your revenue cycle and integrate smoothly with your practice management system.
Read answerHow does revenue cycle management work for dental practices?
Revenue cycle management covers every step from scheduling to final payment collection. It includes eligibility verification, claims submission with proper CDT codes, payment posting, denial management, and AR follow-up.
Read answerWhy are my insurance claims getting denied?
Insurance claims get denied for reasons including missing prior authorization, eligibility verification failures, coding errors, and incomplete patient information. Most denials are preventable with proper front-end processes.
Read answerWhat is prior authorization and why does it cause claim denials?
Prior authorization is pre-approval from an insurance company confirming that a service is medically necessary before it's performed. Claims get denied when authorization isn't obtained, expires before the service date, or doesn't match the procedure actually performed.
Read answerHow do I handle accounts receivable for a dental office?
Dental AR requires managing two collection tracks: insurance claims and patient balances. Focus on front-end verification and same-day claims submission to prevent AR problems before they start.
Read answerWhat bookkeeping software works best for medical practices?
QuickBooks Online is the practical choice for most medical practices. It's the industry standard, integrates with most practice management systems, and any bookkeeper or accountant you work with will know how to use it.
Read answerHow do I track patient payments and insurance reimbursements?
Track patient payments and insurance reimbursements by posting each payment to specific charges in your practice management system. Reconcile posted payments to bank deposits weekly and monitor patient balances separately from insurance AR.
Read answerWhat is HIPAA-compliant bookkeeping for healthcare providers?
HIPAA-compliant bookkeeping means protecting patient information that appears in financial records. It requires Business Associate Agreements, encrypted systems, secure data handling, and proper training for anyone accessing healthcare financial data.
Read answerHow do dental practices manage insurance billing and patient copays?
Dental practices manage billing by verifying coverage before treatment, submitting claims with accurate CDT codes, posting insurance payments, and collecting patient portions at the time of service.
Read answerWhat are common medical billing errors that cost practices money?
Common billing errors include failing to verify patient eligibility, using incorrect procedure or diagnosis codes, missing timely filing deadlines, and not following up on denied claims. These mistakes can cost practices thousands in lost revenue each month.
Read answerHow long should a medical practice keep financial records?
Medical practices should keep most financial records for at least 7 years. Patient billing records may require longer retention due to HIPAA and state medical record laws that overlap with financial documentation.
Read answerWhat is the best way to follow up on unpaid insurance claims?
Start follow-up at 30 days after claim submission, not 60 or 90. Document every contact with the payer, use their portals to check claim status first, and don't accept vague answers about claims being in process.
Read answerHow do I set up bookkeeping for a new chiropractic practice?
Start with separate business accounts and QuickBooks, then build a chart of accounts that tracks different revenue streams like insurance reimbursements and cash-pay patients. Healthcare practices need strong accounts receivable tracking from day one.
Read answerWhat financial reports does a medical practice need monthly?
Medical practices need the standard financial statements plus healthcare-specific reports like AR aging by payer and revenue cycle metrics. Monthly reporting helps catch billing and collection issues before they become cash flow problems.
Read answerHow do I reconcile patient payments with insurance EOBs?
Match each payment to its corresponding EOB line by line, verifying the allowed amount, contractual adjustment, and patient responsibility. Do this weekly to catch payer errors and underpayments before they become difficult to appeal.
Read answerWhat is credentialing and how does it affect medical billing?
Credentialing is the process of verifying provider qualifications and enrolling them with insurance companies. Without it, practices can't bill insurance as in-network providers. The process takes 60 to 180 days and must be completed before seeing patients to avoid revenue loss.
Read answerHow do mental health practices handle billing differently?
Mental health practices bill based on session time rather than procedures, deal with separate behavioral health insurance carve-outs, and face frequent prior authorization requirements. Many operate as cash-pay or out-of-network practices, adding superbill management to their workflows.
Read answerWhat are the biggest bookkeeping challenges for veterinary clinics?
Veterinary clinics face unique bookkeeping challenges including complex inventory tracking, multiple revenue streams, and accounts receivable management. These issues compound when clinics offer emergency services, boarding, or retail products alongside core medical care.
Read answerHow do I manage cash flow for a dental practice with insurance delays?
Collect patient portions at time of service, submit clean claims within 48 hours, and follow up on unpaid claims at 30 days. Maintain a cash reserve and track your AR aging weekly.
Read answerWhat is a clean claim rate and why does it matter?
A clean claim rate measures the percentage of medical claims accepted on first submission without corrections. Industry benchmark is 95% or higher. A low rate hurts cash flow, increases administrative costs, and signals problems in your billing process.
Read answerHow do physical therapy practices track billable units?
Physical therapy billing uses 15-minute units for timed services, calculated using the 8-minute rule. Therapists document start and stop times for each service, and those times determine how many units can be billed.
Read answerWhat bookkeeping records do optometry practices need to maintain?
Optometry practices need records covering both medical and retail operations. This includes patient payments, insurance reimbursements, optical inventory, lab costs, and standard operating expenses.
Read answerHow do home health agencies handle payroll and billing together?
Visit documentation drives both payroll hours and billable services in home health. The operational challenge is coordinating both while managing the cash flow gap between paying caregivers weekly and waiting 30-60 days for insurance reimbursements.
Read answerWhat is the average collection rate for medical practices?
A healthy medical practice should achieve a net collection rate of 95% or higher. This measures what you collect compared to what you're entitled to collect after insurance adjustments. Anything below 90% signals problems with claims, denials, or patient collections.
Read answerHow do I appeal a denied medical claim successfully?
Successful claim appeals start with understanding exactly why the claim was denied, then gathering supporting documentation and submitting a formal appeal within the payer's deadline. Most denials are overturned when you provide the right evidence and follow the process correctly.
Read answerWhat are CPT codes and how do they affect reimbursement?
CPT codes are five-digit numbers that describe medical services performed. Insurance companies use them to determine payment amounts, so using the wrong code means getting paid less than you should or risking compliance problems.
Read answerHow do I track lab costs and supplies for a medical practice?
Set up separate expense categories for lab reagents, testing supplies, and general medical supplies. Code each purchase correctly when it happens and review spending monthly to catch cost increases before they hurt your margins.
Read answerHow much does a bookkeeper cost for a small business?
Monthly bookkeeping services for small businesses typically range from $200 to $800 depending on transaction volume and complexity. The right price depends on what's included and whether the service actually matches what your business needs.
Read answerWhat is the difference between a bookkeeper and an accountant?
Bookkeepers handle daily record-keeping like transaction entry, reconciliations, and financial statements. Accountants analyze those records, prepare tax returns, and provide strategic advice. Most small businesses need both but at different frequencies.
Read answerWhen should a small business hire a bookkeeper?
There's no single right moment, but clear signs include spending hours on books monthly, adding employees, or not knowing if you're profitable. Most owners wait too long.
Read answerWhat does a monthly bookkeeping service include?
Monthly bookkeeping typically includes transaction categorization, bank and credit card reconciliations, financial statement preparation, and month-end close. You get a profit and loss statement and balance sheet each month showing exactly where your business stands.
Read answerHow do I know if my books are behind or need cleanup?
Your books need attention if you can't produce financial statements you trust, bank accounts haven't been reconciled in months, or your accounting software is full of uncategorized transactions.
Read answerWhat is bookkeeping cleanup and how long does it take?
Bookkeeping cleanup is the process of bringing messy or behind financial records up to date. Timeline depends on how far behind you are, transaction volume, and the quality of existing records. A few months might take two weeks while multiple years could take a month or more.
Read answerShould I use cash or accrual accounting for my small business?
Most small businesses do fine with cash basis accounting because it's simpler and gives you more control over tax timing. Accrual makes sense if you carry inventory, have significant receivables, or plan to seek outside financing.
Read answerHow often should I reconcile my bank accounts?
Monthly at minimum for most businesses, weekly for high-volume operations. Regular reconciliation catches bank errors, unauthorized charges, and fraud before they become costly problems.
Read answerWhat financial statements do small business owners need?
Every small business needs three core financial statements: the income statement, balance sheet, and cash flow statement. Together they show whether your business is profitable, financially stable, and able to pay its bills.
Read answerHow do I separate personal and business finances?
Start with a dedicated business bank account and credit card. Every business dollar should flow through accounts used exclusively for business, with consistent owner draws instead of random transfers.
Read answerWhat records should I keep for tax purposes?
Keep documentation for all income, expenses, assets, and employment. Most records need to be retained for at least three years, though some require longer.
Read answerHow do I categorize business expenses properly?
Sort every expense into categories that match your chart of accounts. Use categories specific enough to be useful but not so detailed that you're creating a new one for every vendor. Consistency matters more than perfection.
Read answerWhat is accounts receivable management?
Accounts receivable management is tracking and collecting money that customers owe your business. It includes invoicing, payment follow-up, aging reports, and maintaining records. Good AR management keeps cash flowing so you can pay your own bills.
Read answerHow do I improve my business cash flow?
Cash flow improves when you speed up collections, manage payment timing, and maintain visibility into your numbers. Most cash crunches aren't profit problems. They're timing problems between money coming in and money going out.
Read answerWhat is the best way to track business mileage for taxes?
Use a mileage tracking app that automatically logs trips, or keep a written log in your vehicle. The IRS requires the date, destination, business purpose, and miles driven for each trip.
Read answerHow do I handle owner draws in bookkeeping?
Owner draws are recorded to an equity account, not an expense account. They reduce your ownership stake in the business but don't affect taxable income since you pay tax on business profit regardless of how much you withdraw.
Read answerWhat is a chart of accounts and do I need one?
A chart of accounts is the organized list of categories your business uses to track all financial transactions. Every business needs one because it determines how your financial data gets organized and what your reports can tell you.
Read answerHow do I track inventory in my bookkeeping system?
Inventory tracking starts with enabling inventory features in your accounting software and setting up items correctly. The key is linking purchases to specific products so you can track cost of goods sold and know your actual margins.
Read answerWhat are the most common bookkeeping mistakes small businesses make?
Small businesses commonly mix personal and business finances, fall behind on reconciliation, lose receipts, and miscategorize transactions. These mistakes usually stem from owners trying to handle everything themselves while running their company.
Read answerHow do I prepare my books for tax season?
Preparing for tax season means reconciling all accounts, reviewing expense categories, gathering documents, and addressing outstanding items. Clean books reduce tax preparation time and cost. The best preparation happens year-round with consistent monthly bookkeeping.
Read answerWhat is bank reconciliation and why is it important?
Bank reconciliation is the process of comparing your internal financial records to your bank statements to make sure they match. It catches errors, detects fraud, and gives you an accurate picture of your cash position.
Read answerHow do I handle bounced checks in my bookkeeping?
When a check bounces, you need to reverse the original deposit entry and reclassify the amount as a receivable. You should also record any NSF fees charged by your bank and decide whether to pass those fees along to the customer.
Read answerWhat is the difference between an invoice and a receipt?
An invoice is a request for payment sent before you get paid. A receipt is proof of payment provided after the money is received. The difference comes down to timing in the transaction.
Read answerHow do I track business loans and interest payments?
Record the loan as a liability on your balance sheet, then split each payment between principal and interest. Your lender's amortization schedule shows exactly how to divide each payment.
Read answerWhat is a profit and loss statement and how do I read it?
A profit and loss statement shows your revenue, expenses, and what's left over as profit or loss. Reading it monthly helps you understand where your money is going and whether your business is actually profitable.
Read answerHow do I set up QuickBooks for my small business?
Start by choosing QuickBooks Online or Desktop, then configure your chart of accounts to match your business. Connect your bank feeds, set up customers and vendors, and customize your invoice templates.
Read answerWhat is the difference between QuickBooks Online and Desktop?
QuickBooks Online runs in your browser and stores data in the cloud. QuickBooks Desktop is software installed on your computer with data stored locally. This core difference affects how you access your books, share them with your bookkeeper, and what features you get.
Read answerHow do I connect my bank account to QuickBooks?
In QuickBooks Online, go to the Banking menu and click Link Account to search for and connect your bank. Once connected, transactions import automatically, but you need to review and categorize them before they post to your books.
Read answerCan someone help me clean up my messy QuickBooks file?
Yes, QuickBooks cleanup is a standard bookkeeping service. A professional can reconcile accounts, fix categorization errors, remove duplicates, and get your file back to a usable state.
Read answerHow do I set up a chart of accounts in QuickBooks?
The chart of accounts is the foundation of your financial reports. Start with the five main categories (assets, liabilities, equity, income, expenses), then customize based on what information you need to track for your specific business.
Read answerWhat QuickBooks reports should I run monthly?
Run your Profit and Loss, Balance Sheet, and Cash Flow Statement at minimum. Add Accounts Receivable Aging and Accounts Payable Aging if you invoice customers or owe vendors.
Read answerHow do I fix errors in QuickBooks?
Most QuickBooks errors can be fixed by editing the original transaction directly. For reconciled transactions or prior period mistakes, you may need journal entries or professional help to avoid creating bigger problems.
Read answerCan QuickBooks handle medical practice billing?
QuickBooks is accounting software, not medical billing software. It tracks your revenue and expenses but cannot submit insurance claims, verify eligibility, or manage denials. Medical practices need both a billing system and QuickBooks working together.
Read answerHow do I add my accountant to my QuickBooks account?
In QuickBooks Online, go to Settings, then Manage Users, and invite your accountant using their email address. Choose the Accountant user type to give them professional-level access without sharing your login.
Read answerWhat is the best QuickBooks version for contractors?
QuickBooks Online Plus works for most contractors. It handles job costing, progress invoicing, and subcontractor tracking. Desktop Premier Contractor Edition offers more advanced features but requires local installation.
Read answerHow do I track job costs in QuickBooks?
Enable the Projects feature in QuickBooks Online or create sub-customers for jobs in Desktop, then code every expense and labor hour to the correct job as it happens. The key is coding costs immediately, not weeks later.
Read answerHow do I set up classes and locations in QuickBooks?
Enable classes and locations in QuickBooks Online under Account and Settings, then Categories. Create your categories, apply them consistently to transactions, and run Profit and Loss reports by class or location to see segment performance.
Read answerCan I convert from spreadsheets to QuickBooks?
Yes, you can convert from spreadsheets to QuickBooks. Customer lists, vendor lists, and opening balances import directly through CSV files. The bigger part of the conversion is properly setting up QuickBooks for your specific business.
Read answerHow do I handle multiple businesses in QuickBooks?
Use separate QuickBooks company files for each business entity. Trying to manage multiple businesses in one file creates tax headaches and makes your financials harder to use. The extra subscription cost is worth having clean, separate books for each company.
Read answerWhat training do I need to use QuickBooks effectively?
You don't need certification, but you do need basic accounting knowledge and hands-on practice. Focus on proper setup first, then master the daily functions you'll actually use for your business.
Read answerHow do I set up payroll for my small business?
Setting up payroll requires an EIN, Michigan state tax registrations, employee paperwork, and a system to calculate and remit taxes. Most small businesses use payroll software or outsource it to avoid compliance mistakes.
Read answerWhat payroll taxes do Michigan employers have to pay?
Michigan employers pay Social Security and Medicare taxes (7.65% of wages), federal unemployment tax (0.6% on the first $7,000), and Michigan unemployment insurance (rates vary by employer). You also withhold state and federal income taxes from employee paychecks.
Read answerHow do I handle payroll for employees and contractors?
Employees and contractors require completely separate systems. Employees need tax withholding, quarterly deposits, and W-2s. Contractors just need W-9s collected upfront and 1099s filed at year end.
Read answerWhat is the difference between W-2 employees and 1099 contractors?
The core difference is control. W-2 employees work under your direction with set hours and provided tools. Contractors operate independently, control their own methods, and often serve multiple clients.
Read answerHow often should I run payroll for my business?
Most small businesses use bi-weekly payroll, which balances employee satisfaction with manageable administrative work. The right frequency depends on whether you have hourly or salaried workers, your cash flow patterns, and how much time you want to spend on payroll tasks.
Read answerWhat payroll records am I required to keep?
Federal law requires you to keep employee identification, wage and hour records, and tax documents for at least four years. The specific records span everything from W-4s to time sheets to copies of tax filings.
Read answerHow do I set up direct deposit for employees?
Collect a signed authorization form from each employee with their bank details, enter the information in your payroll system, and run a test transaction before the first live deposit. Plan for prenote verification time and know your bank's submission deadlines.
Read answerWhat forms do I need to file for payroll taxes?
Federal payroll forms include quarterly 941s, annual 940, and year-end W-2s. Michigan requires separate unemployment and withholding filings with the state. Missing deadlines triggers penalties immediately.
Read answerHow do I handle payroll for tipped employees?
Tipped employee payroll requires understanding tip credit rules, tracking both cash and credit card tips, and ensuring employees earn at least minimum wage each pay period. Your payroll software needs proper configuration from the start.
Read answerWhat is workers compensation and do I need it?
Workers compensation is insurance that covers employees injured or made ill by their job. Michigan requires it for businesses with three or more employees, and the cost varies by industry and payroll size.
Read answerHow do I correct a payroll mistake?
The correction process depends on the type of error and when you catch it. Underpayments require supplemental checks, overpayments need employee consent for recovery, and tax withholding errors may require amended filings.
Read answerCan a bookkeeper handle my payroll processing?
Many bookkeepers offer payroll processing as part of their services, though not all of them. It depends on their experience and whether they've built out that capability alongside their core bookkeeping work.
Read answerWhat is the penalty for late payroll tax deposits?
IRS penalties for late payroll tax deposits range from 2% to 15% depending on how late the deposit is. The longer you wait, the higher the penalty, and willful failure to pay can result in personal liability.
Read answerHow do I set up employee benefits deductions in payroll?
Start by gathering the specific deduction amounts and tax treatment from each benefits provider. Then configure your payroll system with the correct pre-tax or post-tax classification for each deduction type.
Read answerWhat is Michigan unemployment insurance tax rate?
Michigan unemployment insurance tax rates range from 0.06% to 10.3% depending on your experience rating. New employers typically pay 2.7% on the first $9,500 of each employee's wages.
Read answerWhat business taxes do Michigan small businesses pay?
Michigan small businesses pay federal income tax, state income tax at a flat 4.25%, and self-employment tax if applicable. You may also owe sales tax, payroll taxes, and business personal property tax depending on your operations.
Read answerHow do I register for Michigan sales tax?
You register through Michigan Treasury Online at mto.treasury.michigan.gov. Apply for a Sales Tax license as part of the Sales, Use, and Withholding registration. The fee is $10 and processing takes a few business days.
Read answerWhat is the Michigan corporate income tax rate?
Michigan's Corporate Income Tax rate is 6%, applying to C-corporations doing business in the state. Most small businesses are pass-through entities that pay individual income tax instead.
Read answerDo I need a bookkeeper familiar with Michigan tax laws?
It helps, but not for the reasons you might think. Bookkeepers don't file your taxes. They set up your books so your accountant can file accurately. Michigan-specific knowledge matters most for payroll setup and sales tax categorization.
Read answerWhat are Metro Detroit small business resources for accounting help?
Metro Detroit offers several free and low-cost resources including the Michigan SBDC, SCORE Southeast Michigan, and local chambers of commerce. For ongoing support, professional bookkeeping services provide consistent help that free resources can't match.
Read answerHow do I file quarterly estimated taxes in Michigan?
Use Form MI-1040ES or pay through Michigan Treasury Online by the quarterly deadlines in April, June, September, and January. Calculate payments based on expected income or use the safe harbor method to avoid underpayment penalties.
Read answerWhat is the Michigan flow-through entity tax?
The Michigan flow-through entity tax is an optional election that lets S-corps, partnerships, and LLCs pay state income tax at the business level. It exists as a workaround to the federal SALT deduction cap.
Read answerWhere do I register my business for Michigan taxes?
Register through Michigan Treasury Online (MTO) at mto.treasury.michigan.gov. This handles sales tax, withholding tax, and corporate income tax. Unemployment insurance is registered separately through the state's UIA.
Read answerWhat bookkeeping services are available in Macomb County?
Macomb County has a range of bookkeeping options including monthly bookkeeping, catch-up work, payroll processing, and specialized services for industries like healthcare and construction. The right fit depends on your business size and what you need beyond basic transaction work.
Read answerHow do I handle city income tax for Detroit businesses?
Detroit businesses must withhold city income tax from employee wages at 2.4% for residents and 1.2% for non-residents. You register with the City of Detroit, file quarterly returns, and submit W-2 data annually.
Read answerWhat tax deductions are available for Michigan small businesses?
Most small business deductions are federal and apply regardless of state. Operating expenses, vehicle costs, equipment, insurance, and professional services all reduce taxable income. Michigan's flat state tax means deductions flow through straightforwardly.
Read answerDo Michigan LLCs need to file an annual report?
No. Michigan is one of the few states that doesn't require LLCs to file annual reports. This makes ongoing compliance simpler, though you still have other obligations to maintain your LLC in good standing.
Read answerWhat is Michigan Treasury Online and how do I use it?
Michigan Treasury Online is the state's portal for registering, filing, and paying business taxes. You'll use it to manage sales tax, withholding tax, and other state tax obligations.
Read answerHow do I get a Michigan business tax ID number?
Register through Michigan Treasury Online to get your state tax ID. You'll need this if you're collecting sales tax, withholding income tax from employees, or paying state unemployment insurance.
Read answerWhat are the sales tax filing deadlines in Michigan?
Michigan sales tax returns are due on the 20th of the month following your reporting period. Your filing frequency depends on your annual sales tax liability, with thresholds at $750 and $3,600 determining whether you file annually, quarterly, or monthly.
Read answerHow is bookkeeping different for construction companies?
The biggest difference is job costing. Construction bookkeeping tracks every expense and revenue by project, not just by category. You also deal with progress billing, retainage, subcontractor management, and equipment allocation that most businesses don't have.
Read answerWhat is job costing and why do contractors need it?
Job costing tracks every expense and labor hour against specific projects so you know exactly how much each job cost versus what you billed. Without it, contractors can't tell which jobs actually made money and which ones lost money despite looking profitable on paper.
Read answerHow do I track project costs for each construction job?
Set up job numbers in your accounting software and assign every expense to a specific project. Create cost codes for labor, materials, and subcontractors, then compare budget to actual costs weekly to catch overruns before they get out of control.
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