Bookkeeping for a Chiropractic Clinic in Texas (Chart of Accounts, Prepaid Plans, Supplements, and Monthly Close)

Disclaimer: The information on this website (including all examples, explanations, and content) is for general informational purposes only and should not be considered tax, legal, or financial advice. Always consult with a qualified professional about your specific situation.

Chiropractic Bookkeeping Has Three Specific Wrinkles

Chiropractic clinic bookkeeping has three specific items that a generic small business chart of accounts misses: the split between insurance and cash pay revenue, the deferred revenue from prepaid care plans and memberships, and the supplement and retail product inventory that runs through cost of goods sold.

This post walks through the practical bookkeeping setup for a Texas chiropractic clinic. The related operational topics live in our payroll for chiropractic clinics in Texas, tax deductions for chiropractic clinics in Texas, and profit but no cash in a chiropractic clinic posts. For the small business bookkeeping foundations this post builds on (cash vs accrual, chart of accounts basics, monthly close discipline), see our small business bookkeeping 101 guide and top 5 bookkeeping mistakes that wreck your tax return.

Chart of Accounts for a Chiropractic Clinic

Revenue Accounts

  • Chiropractic Service Revenue (or split by adjustment, decompression, therapy, exam if useful)
  • Insurance Revenue (or net of contractual adjustments)
  • Cash Pay Revenue
  • Personal Injury Case Revenue (often tracked separately due to extended collection timing)
  • Care Plan Revenue (recognized as visits are delivered)
  • Massage Therapy Revenue (if offered)
  • Supplement and Retail Revenue
  • Orthotic and DME Revenue

Cost of Service / COGS

  • Supplement and Retail Product COGS
  • Treatment Consumables (table paper, lotions, electrotherapy pads)
  • Cold Laser Consumables (if applicable)
  • Massage Supplies (if offered)

Operating Expense Accounts

  • Wages and Payroll Taxes
  • Employee Benefits
  • Rent
  • Utilities
  • Phone and Internet
  • Practice Management Software (ChiroTouch, ChiroFusion, Genesis, ChiroSpring)
  • Marketing and Advertising
  • Continuing Education
  • Professional Memberships (ACA, ICA, TCA)
  • Malpractice Insurance
  • General Liability Insurance
  • Office Supplies
  • Repairs and Maintenance
  • Depreciation Expense

Balance Sheet Accounts

  • Operating Cash Account
  • Reserve / Savings Account
  • Insurance Receivable (separate from Patient Receivable and PI Receivable)
  • Patient Receivable
  • Personal Injury Case Receivable (often the largest and oldest)
  • Supplement and Retail Inventory
  • Fixed Assets (Adjustment Tables, Decompression Equipment, X-ray, etc.)
  • Accumulated Depreciation
  • Accounts Payable
  • Credit Cards Payable
  • Loans Payable
  • Deferred Revenue (prepaid care plans) — critical
  • Owner Equity

Adjustments and Write Offs

  • Insurance Contractual Adjustments
  • Patient Adjustments (employee discounts, hardship)
  • Bad Debt Expense or Write Offs

Insurance vs Cash Pay vs Personal Injury

Chiropractic revenue often comes from three very different sources with very different collection patterns.

Insurance billed services behave like any third party billed service: charges go out, contractual adjustments reduce to net revenue, EOBs post payment after a delay, denied claims need work.

Cash pay services post revenue immediately with no adjustments. The collection happens at the time of service. These are the easiest to bookkeep.

Personal injury cases are revenue earned now but typically not collected until case settlement (6 to 18+ months later). They produce a long aged receivable that the books have to track separately. Many clinics use letters of protection (LOPs) to secure payment from settlements; these are legal documents, not bookkeeping items, but they affect collectability.

Tracking these three revenue streams separately on the chart of accounts lets the clinic see what percentage of revenue is each type, what the cash conversion looks like for each, and where the cash leaks are.

Prepaid Care Plans and Deferred Revenue

Many chiropractic clinics sell prepaid care plans (12 visits for $1,200, monthly visit memberships, family plans). Deferred revenue accounting is critical here.

When a client buys a 12 visit plan for $1,200:

  • Cash increases by $1,200
  • Deferred Revenue increases by $1,200

When the client redeems each visit:

  • Deferred Revenue decreases by $100 (or the per visit value)
  • Care Plan Revenue increases by $100

Without deferred revenue accounting, the P&L is wrong. Strong sales months look unrealistically profitable. Visit delivery months look weak. The owner cannot tell which months are genuinely strong and which are just collecting cash for future services.

Practices that distribute prepaid plan cash as if it were profit create problems later when the visits have to be delivered against cash that has already been distributed.

Supplement and Retail Inventory

Supplements, orthotics, posture braces, and other retail products are tracked through inventory and COGS.

When supplements are ordered:

  • Cost posts to Supplement Inventory (balance sheet)
  • Cash or A/P moves accordingly

When supplements are sold to a patient:

  • Cost posts to Supplement COGS (P&L expense)
  • Supplement Inventory decreases
  • Revenue posts to Supplement Revenue

Slow moving supplement SKUs are a common silent cash drain. The product was paid for, but it is not selling.

Equipment Depreciation

Adjustment tables, decompression equipment, X-ray systems, cold laser, and rehab equipment are tracked as fixed assets and depreciated. Section 179 and bonus depreciation can accelerate the tax deduction. Our Section 179 vs bonus depreciation post covers the tax side.

The Monthly Close

A good monthly close for a chiropractic clinic produces:

  • Reconciled bank and credit card statements
  • Insurance, patient, and PI receivable reconciled to practice management aging
  • Supplement and retail inventory adjusted to physical count
  • Deferred revenue rolled forward (care plans recognized as visits are delivered)
  • Owner compensation recorded correctly
  • Loan principal and interest split correctly
  • Depreciation entries
  • Reviewed P&L and balance sheet

Common Chiropractic Bookkeeping Mistakes

Treating Prepaid Plan Cash as Revenue

The single most common mistake. Plan cash for future visits is deferred revenue, not current revenue.

Mixing Insurance and Cash Pay Revenue in One Account

Hides which side of the business is performing.

Not Separating PI Receivable

PI receivable behaves very differently from regular insurance receivable. Combining them hides the collection lag.

Expensing Supplement Purchases at Order

Inventory is a balance sheet item. COGS is the expense.

Recording Equipment Purchases as Expense

Equipment is a fixed asset. Depreciation is the expense.

Mixing Personal and Practice Expenses

Skipping the Monthly Close

Frequently Asked Questions

Should I track PI receivable separately?

Yes. PI receivable has different aging, collection probability, and timing than regular insurance receivable. Separate tracking is essential.

Cash basis or accrual basis?

Most chiropractic clinics with prepaid plans benefit from accrual basis for management decisions because of deferred revenue. Talk to your tax advisor about the right method for tax purposes.

How often should I count supplement inventory?

Monthly at minimum. Quarterly is too infrequent for most clinics; significant shrinkage and slow movement can occur.

Should I outsource bookkeeping?

Most chiropractic clinics benefit from outsourcing to someone familiar with chiropractic bookkeeping specifically.

Getting Chiropractic Clinic Bookkeeping Right

Chiropractic bookkeeping is mostly about separating the three revenue streams (insurance, cash pay, PI), handling deferred revenue correctly for prepaid plans, and tracking supplement inventory through COGS. Clinics that get these right have books that actually tell them what is happening.

If you also want the related operational topics, our payroll for chiropractic clinics in Texas guide covers the staff side, our tax deductions for chiropractic clinics post covers deductions, and our profit but no cash in a chiropractic clinic post covers cash flow.

We work with chiropractic clinic owners across Quinlan, Hunt County, Rockwall, Kaufman, and the greater Dallas area on bookkeeping, payroll, tax preparation, and broader tax planning.

Want chiropractic clinic bookkeeping that actually tells you what is going on? Contact us here to talk about getting your books, deferred revenue, and inventory tracking set up.