“Our practice management software (PMS) indicates that we collected $120K last month, but our bank shows only $96K. What’s going on?”
If you are a CFO or controller handling dental collections reconciliation, this situation probably feels familiar. The discrepancy between what your PMS shows as collected and what actually appears in your bank account is not just frustrating; it can signal deeper issues within your revenue cycle management. This variance can become a serious concern, especially if you are preparing for an audit, facing pressure from private equity sponsors demanding clarity, or trying to resolve discrepancies during monthly closes.
Here’s a breakdown of what is causing the mismatch and what high-performing finance teams do differently.
Timing Lags Between Systems
Electronic Funds Transfer (EFT) payments, insurance checks, and credit card batches often do not align perfectly across systems. Your PMS may mark a claim as “paid” once it is processed, but the actual deposit may take 1 to 3 business days to settle.
How It Shows Up: If your PMS reports $50K in collections last Friday, but credit card processors and EFTs don’t settle until Monday, Friday’s numbers may appear short by $10K to $15K until deposits post.
Manual Entry Errors and Workflow Gaps
When front desk staff or billing teams manually enter payments, especially when doing dental collections reconciliation across clearinghouses, card terminals, and paper checks, errors can occur. A transposed number or duplicate entry can disrupt reconciliation across systems.
Incomplete or Split Payments
Insurance payments often arrive in partial batches, with patients covering copays at the desk. If a claim is underpaid and appealed later without a disciplined Explanation of Benefits (EOB) tracking and allocation, these mismatches can accumulate, leading to months of confusion and lost revenue.
Three Fixes Every CFO Should Implement
You don’t need a complete revenue cycle overhaul to resolve these issues. You need consistency, automation, and visibility.
1. Implement Daily or Weekly Reconciliation
Relying only on the month-end close is too late. Your team should reconcile:
- PMS collections against bank deposit confirmations
- Credit card batch reports against merchant statements
- EFT notifications against bank activity
- Check logs against bank mobile deposit reports
Pro Tip: Create a simple dashboard or checklist with your accounting partner to monitor dental collections reconciliation status each week.
2. Encourage Digital Payments and Reduce Paper Checks
Each paper check introduces delays and risks. Promote EFT payments to payers and transition patients to card-on-file where feasible. Standardize merchant processing.
Split the Work: Have the front desk manage physical checks while your accounting partner handles digital payments and reconciliations.
3. Develop a Reliable EOB Reconciliation Process
Insurance EOBs can be complicated. Payments for multiple patients, services, and partial settlements often arrive together and rarely match invoice-level details. Without a robust EOB tracking system, you are navigating blind.
Whether you insource or outsource, the process should:
- Match every EOB to a specific claim
- Reconcile every claim to a payment
- Flag discrepancies in real time
By implementing these strategies, you can better align your collections with your bank deposits and improve the overall health of your revenue cycle management.
What High-Performing Dental Finance Teams Do
Fractional accounting teams with dental expertise can often resolve financial issues more quickly than internal teams, particularly in multi-location groups, dental service organizations (DSOs), or high-growth practices. Here’s what a strategic finance partner offers:
- Clean, accrual-basis financial statements with accurate timing.
- Well-designed workflows for front desk operations, billing, and bank reconciliation.
- Real-time dashboards and reporting for tracking collections.
- Decoding of Explanation of Benefits (EOB), variance tracking, and resolution of exceptions.
Reconciliation Is More Than a Nuisance
For finance leaders, discrepancies in financial records extend beyond simple bookkeeping issues; they significantly affect:
- Cash flow forecasts
- Board reporting accuracy
- Audit readiness
- Investor confidence
If you’re preparing for due diligence, private equity investment, or simply tired of struggling at every financial close, now is the time to take action.
Let Bright Balance Help to Eliminate the Guesswork
At Bright Balance, we assist dental finance leaders in bridging the gap between what their Practice Management System (PMS) reports and what actually appears in the bank. Our systems are designed for scalability, audit preparation, and clear communication for investors.
Contact our Dallas office for a complimentary CFO consultation to explore the benefits of Fractional Accounting with Bright Balance today!
