Merchant reconciliation in a medical practice is harder than in most businesses because the money rarely matches what got recorded on the patient ledger. A patient pays a $150 copay on Tuesday, the card processor batches it Tuesday night, and the net amount (after fees) lands in the bank Wednesday or Thursday. Insurance EFTs arrive on their own schedule with their own remittance details. Trying to reconcile patient by patient against bank deposits is the wrong approach and will drive you crazy.

The right approach is to reconcile by deposit batch, not by individual charge. Pull the daily batch report from your payment processor, whether that’s Stripe, Square, a card terminal provider, or whatever runs through your practice management system. That report shows the gross amount of cards processed, the fees taken out, and the net amount deposited. The net is what hits the bank. Match that net deposit to the bank feed first, then explain the difference between gross and net with a fees expense line.

Insurance EFTs need their own treatment. Each payer sends an electronic funds transfer along with an ERA (electronic remittance advice) that breaks down which claims are being paid, what was adjusted, what was denied, and any patient responsibility. The EFT amount on the bank statement should match the total on the ERA. Post the payment to the patient ledger using the ERA detail so each claim is closed out correctly. If you skip posting the ERA detail and just record the lump deposit as revenue, the patient ledger never reflects reality and aging reports become useless.

To handle the timing gap between date of service and bank deposit, use an undeposited funds or merchant clearing account. When a patient pays at the front desk on the date of service, the payment posts to the clearing account. When the processor deposits the batch (minus fees) into the bank, you move the gross amount out of the clearing account, record the fees as an expense, and the net matches the bank. The clearing account should zero out within a few days. If it doesn’t, something is stuck and needs investigation.

Refunds and chargebacks come out of future deposits, not as separate withdrawals. A patient refund of $75 will reduce a later batch deposit by $75. Your processor report shows it as a negative, and your reconciliation needs to record both the refund to the patient ledger and the reduction in the deposit. Chargebacks work the same way and usually carry an additional fee from the processor.

The reports you need every month are the payment processor statement showing gross, fees, refunds, and net by batch, the ERA detail for every insurance EFT, and the patient ledger or day sheet from your practice management software. Medical and dental practices that try to reconcile without all three end up with revenue numbers that don’t match collections, AR that doesn’t match the patient ledger, and a tax return built on shaky data.

If your books and your practice management software have drifted apart, the fix is rebuilding the reconciliation process from the batch level up. That’s the kind of cleanup work we handle as part of small business accounting, bookkeeping, and tax services in Jacksonville, NC, and getting it right once usually prevents the same problems from coming back.