Reconciliation is the process of checking that what's in your books actually matches your bank and merchant account statements. It sounds like a formality. In practice, it's the single biggest reason we see practice owners get surprised by numbers that don't reflect reality.

When reconciliation gets skipped for a few months, small errors start stacking up. A duplicate insurance payment entry. A patient refund that never got recorded properly. A merchant fee that got mis-categorized and is quietly sitting in the wrong expense account, throwing off your actual overhead numbers. Individually minor. After three or four months without reconciliation, these add up to a set of books that no longer reflects what's actually happening in the practice.

The real cost shows up when you try to rely on those numbers for something important. Applying for a practice loan or equipment financing with books that don't reconcile means a lender questioning your numbers, or approving financing based on a picture of the practice that isn't accurate. Filing taxes off unreconciled books means either overpaying because expenses got missed, or underpaying because income got counted twice somewhere in the mess, both of which create problems later.

There's also a quieter cost that doesn't show up on any report: not trusting your own numbers. When you're not confident your books are accurate, you stop looking at them, and decisions about associate compensation, staffing, and spending start getting made on gut feel instead of data that was sitting right there the whole time.

Monthly reconciliation catches these issues while they're small and easy to fix. Waiting until year-end, or until a lender or the IRS asks questions, means untangling months of accumulated errors under real time pressure.

If it's been a while since your practice's books were actually reconciled against your statements, that's worth checking before you make any decision that depends on your numbers being right.

Jeremy Brewer is the founder of 911 Bookkeepers LLC in Baton Rouge, Louisiana. 911 Bookkeepers partners with MBJA Accounting Service to give chiropractic and MDVIP practices clean, current financials. He is a Xero Certified Advisor.