The 90-minute monthly close

What the close actually checks

A monthly close confirms that every dollar the practice took in or paid out last month is accounted for and correctly categorized — nothing more. It is not the moment to chase a stalled claim or renegotiate a fee schedule; it is a fixed sequence: reconcile deposits, categorize expenses, check contractor totals, set aside taxes, and file the record.

Running it as the same short checklist every month, rather than an open-ended review, is what keeps it close to 90 minutes once the habit is set. The first cycle or two runs longer while you build a real chart of accounts — separate categories for clinical revenue, contractual write-offs, supplies, payroll, and owner draws — instead of one undifferentiated business checking account, because these numbers are what your Schedule C return will report at year-end 1Ref 1Internal Revenue Service (2026).Self-employed individuals tax center.That self-employed clinicians file Schedule C and owe self-employment tax, the frame the monthly tax set-aside is built on.. After that, most of the time each month goes to reviewing what changed, not relearning the process.

The 90-minute breakdown

Ninety minutes divides into five blocks, in this order, because each one depends on the last: reconciliation has to happen before categorization means anything, and categorization has to be done before the tax set-aside is a real number rather than a guess. The block below is a starting allocation — trim it once the routine is familiar.

Reconcile the bank and the card processor first

Reconciliation means matching two independent records — the bank statement and what your bookkeeping software shows — line by line, and it comes first because nothing else in the close means anything until the underlying numbers agree. Card-processor deposits need the same treatment: the batch total your software logged should match what actually landed in the bank, net of the processing fee.

A gap between the two usually means a delayed deposit, a chargeback, or a fee the software booked differently than the processor did — worth chasing down the same month, before three months of small unreconciled gaps turn into a real reconciliation project. This is also where the discipline that keeps bookkeeping software free of patient-identifiable detail matters most: reconcile at the batch level, not patient by patient.

Categorize expenses against a real chart of accounts

Every expense the month produced needs a category, not just a running lump labeled 'supplies' — office costs, continuing education, licensure fees, supervision, and malpractice premiums are each their own line, because a business expense has to be ordinary and necessary for the practice to be deductible in the first place 2Ref 2Internal Revenue Service (2026).Guide to business expense resources.That a business expense must be ordinary and necessary to be deductible, the standard the monthly categorization step applies.. A category-by-category view is also what lets you catch a subscription you forgot you were still paying for.

Equipment bought outright above a certain cost usually needs different treatment than a routine expense — flag it as its own line during the close, and save the actual write-off decision for tax time rather than resolving it in the monthly routine.

Confirm contractor payments against the 1099-NEC threshold

Track a running total for anyone you pay who isn't a W-2 employee — a clinical supervisor, a biller, a covering clinician — because payments of $600 or more to a nonemployee for services trigger a 1099-NEC obligation at year-end 3Ref 3Internal Revenue Service (2026).About Form 1099-NEC, Nonemployee Compensation.That $600+ payments to a nonemployee for services trigger a 1099-NEC, the threshold the monthly contractor check tracks toward.. Catching this monthly means you're not reconstructing a full year of payments to one contractor in January.

A simple running total per contractor, updated at each close, is enough — a full contractor-payment system isn't required for a practice paying one or two people. What matters is that the total exists somewhere before January, not that it lives in specialized software.

Set aside the tax slice before spending the rest

Move a fixed percentage of the month's net income into a separate account the same day the close is finished — before it's available to spend on anything else. The reference point is your quarterly obligation: estimated tax is due four times a year, with a safe-harbor based on this year's or last year's total, and coming up short between now and the next due date is what triggers the underpayment penalty 4Ref 4Internal Revenue Service (2026).Estimated taxes.That estimated tax is due quarterly with safe-harbor rules, the standard the monthly tax set-aside is sized against..

The percentage that works varies by tax bracket and entity structure, so treat it as a number to revisit with your preparer rather than a fixed rule — many solo clinicians set aside roughly a quarter to a third of net income, adjusted after a first full year of real numbers. Reviewing the p&l in ten minutes right after the close is what tells you whether that month's net income was actually strong or just looked that way because a big claim finally paid.

File the month's record where an audit could find it

Save the reconciled bank statement, the card-processor summary, and a note on anything unusual that month in the same folder before moving on. The IRS generally wants these financial records kept for three years, longer if income was substantially underreported or the return involved employment taxes 5Ref 5Internal Revenue Service (2026).Recordkeeping.The 3/6/4-year windows for retaining financial records, applied to the monthly close's reconciled statements and receipts. — and correspondence, office, and field audits all start with a request for exactly this kind of record 6Ref 6Internal Revenue Service (2026).IRS audits.What an IRS audit requests and expects, the standard the filed monthly close record is meant to satisfy..

Financial-record retention runs on its own clock, separate from however long you keep clinical documentation — don't let one schedule substitute for the other. A close that's filed consistently every month also turns "we're being examined" from a scramble into a request you can answer within a day.

Where the close feeds the rest of your numbers

Once the close is clean, the solo dashboard turns it into a handful of monthly trend lines, and the annual budget in an afternoon repeats the same discipline once a year at a longer horizon — neither works without an accurate close feeding it.

If pulling these numbers each month feels like archaeology instead of a quick glance, that's usually a software problem, not a discipline problem — books software should surface a reconciled P&L in a couple of clicks, not require rebuilding a report from raw transactions by hand.