• Julie Herres

EHRs and QuickBooks

Updated: Jan 23




How do your EHR system and QuickBooks Online work together?


When your Simple Practice, Therapy Notes, or other EHR software is not synced with QuickBooks, it’s much harder to keep track of your finances. Let’s get them working together!


QuickBooks Online (QBO) is the #1 small business financial software. It makes sense that it would be popular among therapy practices. As a reminder, the EHR system will hold all your accounts receivable and billing data details–while QBO will reflect a summarized version of your sales.


QBO is NOT HIPAA compliant so we do not recommend using this for billing–and protected health information should never be in QBO. Actually, most financial softwares out there are not HIPAA compliant. Billing should always be done in an EHR with a billing module, or in some other medical billing software.


If your current EHR system can integrate with QBO then your life just got easier! Head over to the QuickBooks App Store, search the EHR system you currently use, and click the “get app now” button to connect it to your QuickBooks file.


What if my EHR doesn’t integrate?


If your EHR software does not integrate with QBO, you’ll want to make sure your cash basis income is reflected in the QBO software.


Let’s walk through how to do this!


From the EHR System:


Most EHR systems have summary reports for sales activity in a selected period of time. These reports should include the following:


  • Total payments received (insurance payments as well as patient payments)

  • Types of payments: cash, credit card or check

  • Fees associated with processing payments (aka merchant fees)

  • Refunds


You can decide to enter summary information either daily, weekly or monthly. Daily will usually reconcile better with activity to the bank account (i.e. credit cards should be batched out daily, and cash and check payments should be deposited at the financial institution daily).


This is a simple way to get sales in your QBO, but contact us for more customizations or any other questions!


From QuickBooks Online:


In QBO, you’ll want to first set up the following accounts in your Chart of Accounts:


  • Cash Clearing (Bank Type Account)

  • Credit Card Clearing (Bank Type Account)


Once you have those added, you can set up a Product/Service for the following:


  • Service Type - Patient Income (mapped to an Income Account)

  • Service Type - Insurance Income (mapped to an Income Account)

  • Service Type - Credit Card Payments (mapped to Credit Card Clearing)

  • Service Type - Cash and Check Payments (mapped to a Bank Clearing account)

Once you have set all of those services up you can use the Bank Feeds to add all the bank account deposits to the Cash Clearing or Credit Card Clearing Accounts. The Clearing Accounts will accumulate a balance with each deposit.


(Tip: Set up a rule based on the bank text that is downloaded with the transaction, and Auto Add for additional time savings.)


Then, enter sales receipts using the reports from your EHR system. The summarized payments entered in the sales receipt will decrease the balances in the clearing accounts. The clearing accounts should have a ZERO or close to zero balance if both the sales receipts and deposits (from bank feed) are entered correctly.


When creating the sales receipts in QBO, the Total Gross Income (not net income!) is entered as a positive number and each payment is entered as a negative number. (This is a Zero-Sum Sales Receipt!) The Payments should be assigned to the clearing accounts, while the refunds go to Patient Refunds (Income account) and the processing fees go to your Credit Card Processing Fees (expense account).


If you like you can also break out each income type (insurance payments, client payments, etc).


When you run a Profit and Loss and Balance Sheet report:


Profit and Loss – Check the income, it should match the sales from the EHR report

Balance Sheet – Check the clearing accounts, they should be close to zero. Reconcile these accounts often to a Zero Balance.


There you have it!


Need more assistance?


We’ve outlined some of the basics here, but there is so much more you can explore as you integrate these softwares. If you are needing assistance with other situations–wanting to sell products, or track sales tax–whatever it is, we can help customize your setup. Schedule a free consultation with one of our team members here!



This article is designed to provide information only and should not be considered legal or tax advice. Because of the complexity of the law and the variables in your own personal tax situation, you can’t rely on our advice specifically related to your unique circumstances. In order to get the best tax savings and legal advice available to you, you should consult with your own accountant, attorney or advisor regarding your particular facts and circumstances. GreenOak Accounting is an accounting firm that specializes in working with counselors and therapists in private practice. We provide monthly accounting & bookkeeping services, 1-time services and online courses. For more information on our specialized services for therapists please visit https://www.greenoakaccounting.com/our-specialized-services-for-therap

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