How do I set up the books before opening a direct primary care or concierge practice?

Start setting up the books a few months before you see your first patient. The steps happen in a specific order. Getting them right before opening is much easier than fixing a year of mixed personal and business transactions later.

Choose your entity and tax treatment first. Most direct primary care and concierge doctors form a professional LLC or professional corporation, depending on what their state allows for medical practices. The bigger decision is how the practice gets taxed. An S-corp election can save a real amount in self-employment tax once the practice is profitable. It also adds payroll for yourself and a separate business return, and the election has filing deadlines. Talk it through with someone who provides tax services for physicians before you file the paperwork, not after.

Once the entity exists, get an EIN from the IRS and open a business checking account and a business credit card. Run every practice expense through those accounts from the beginning, including your lease deposit and your EHR subscription. Paying for things personally and sorting it out later is the most common reason new practices start out behind.

Set up QuickBooks Online with a chart of accounts built for a medical practice. Generic templates won’t separate the numbers you’ll actually want to watch. For a membership practice, that usually means membership fees as their own revenue line. You’ll also want separate lines for in-office labs, dispensed medications, and any supplements or retail products. On the expense side, set up accounts for wholesale drugs, outside lab costs, EHR and membership software, and malpractice coverage.

Connect your membership billing platform so fees post correctly. Most platforms deposit payments in batches with processing fees already taken out. If those deposits go straight into QuickBooks as revenue, your income is understated and nothing reconciles. Record gross membership revenue and processing fees separately. If patients can prepay for a full year, track those payments so one strong month doesn’t distort how the rest of the year looks.

Set up payroll in Gusto before your first hire, not the week they start. State withholding and unemployment accounts can take a few weeks to come through, and your first nurse or medical assistant will expect to be paid correctly and on time.

Track startup costs from the start. Expenses before opening, like rent during buildout, marketing, staff training, and consulting fees, are startup costs. You can deduct up to $5,000 of them in your first year, but that amount shrinks dollar for dollar once total startup costs pass $50,000. Whatever you can’t deduct right away is amortized over 15 years. Equipment such as exam tables, EKG machines, and lab analyzers is handled separately and can be depreciated or expensed. Legal fees to form the entity count as organizational costs, which have their own $5,000 limit. Keep every pre-opening receipt in one place and label it so nothing gets lost by tax time.

If you’d rather have this done for you, our new practice setup service covers structure, books, payroll, and software before you open. It’s a one-time fee of $500 to $5,000 depending on how complex the practice is. You open with books that already match how a membership practice runs, so your first year of numbers is useful instead of something to clean up.