Dental bank reconciliation
Dental bank reconciliation, also called payment reconciliation, is matching every payment a practice receives (insurance EFTs, checks, virtual cards and patient card payouts) to what was posted in the practice management system and to the deposit in the bank, then booking it in QuickBooks or Xero. When the PMS, the bank and the books agree, the month can close.
Also calledPayment reconciliationInsurance payment reconciliationThree-way reconciliation
By Dr. Maya Arnaout, DDS, VP of RevenuePublished 3 min read
What gets reconciled?
Every way money reaches the practice, each with its own trail:
| Payment | What the bank shows | Match it to |
|---|---|---|
| Insurance EFT | One ACH deposit from the payer, with a trace number | The ERA with the same trace number, then each claim posted in the PMS |
| Paper check | A deposit that may hold several checks at once | The EOB for each check number, then the postings |
| Virtual card | A card processor payout, net of the processing fee | The remittance for the card, with the fee booked as an expense |
| Patient card payments | Processor payouts that batch many patients and days, net of fees | Each payment posted to the right patient in the PMS |
Why do lump-sum EFTs make reconciliation hard?
A payer does not send one deposit per claim. It sends one EFT for everything it paid in that run: many patients, sometimes more than one location under the same tax ID, minus any recoupments. The bank line shows a payer name, a trace number and one total.
SAMPLE DENTAL PLAN HCCLAIMPMT
Bank deposit · Trace 0007731905
+$2,418.30
Dana Whitfield
Main Street office · Cleaning and exam
$412.00
Marcus Lee
Main Street office · Filling
$268.50
Priya Raman
Westside office · Crown
$1,096.80
Owen Castillo
Westside office · Root canal
$725.00
Recoupment
Main Street office · Overpayment on an August claim
-$84.00
Four claims, $2,502.30, minus an $84.00 recoupment, across two offices: $2,418.30 deposited.
To reconcile it, someone finds the ERA with the same trace number, checks that its claims add up to the deposit, and confirms each one was posted to the right patient and location. A deposit with no remittance, or a remittance with no deposit, has to be chased.
How does it tie to QuickBooks or Xero?
The books need one entry per bank deposit, with processing fees and any interest on their own lines, and revenue by location for a group. When the PMS postings, the bank deposits and the books all agree, that is three-way reconciliation. Every difference should be named, owned and dated, not carried as an unexplained balance.
How often should a practice reconcile?
Daily or weekly, not only at month end. A difference found the day after it happens takes minutes to trace. Found four weeks later, it means digging through statements, remittances and ledgers, and some of it is never found.
What differences come up?
- Money in the bank that was never posted in the PMS.
- Payments posted in the PMS with no deposit behind them yet.
- A recoupment that reduced the deposit but was not posted against the original claim.
- Card processing fees netted out of a payout.
- A payment posted to the wrong patient or the wrong location.
How ScoutIQ handles it
ScoutIQ matches every EFT, check and virtual card to the ERA or EOB that explains it and to the bank deposit, and posts every patient payment to the right patient and procedure. Deposits and card fees are booked to QuickBooks or Xero, and 99% of patient payments reconcile with no human touch.
Insurance Billing Automation
ERAs and EOBs read; EFT, check and card payments reconciled.
See Insurance Billing Automation