Medical Center and Medspa Bookkeeping

Expansion sounds exciting. New patients, new staff, more revenue. But before a medspa opens its second or third location, the foundation has to be right.

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Each new site adds complexity: more entities, more payroll, more intercompany movement, and a lot more opportunity for the books to go sideways if the structure is not clear.

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These ten questions are the ones to ask before you sign another lease or incorporate another business. They help determine whether your current accounting setup can scale and what needs to change so growth feels organized instead of chaotic.

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1. How are your entities set up?

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Is your practice a single company, or do you operate with both a Professional Corporation and a Management Services Organization? If you already have multiple locations, are they separate entities or all under one umbrella?

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Your legal and tax structure determines how many sets of books you need, how income flows between companies, and how payroll is handled. This is a conversation to have with your business attorney first. Once you decide on the structure, we take it from there on the bookkeeping side.

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2. How does your MSA define the management fee?

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Your Management Services Agreement dictates how the MSO is compensated. Is the fee a flat amount, a percentage of revenue, or tied to location performance? If the agreement was written when you only had one site, it may not account for growth. Before expanding, review it with your attorney and medical director so the fee structure scales cleanly as the PC network grows. Opportunities can appear fast, so it is best to be prepared.

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3. Are your books already using class or location accounting?

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If you are transitioning from another bookkeeper, are your books already broken down by class or location? Or is this a new setup? QuickBooks Online can support both methods. If your prior bookkeeper did not implement them, we need to pick the right cutoff date to switch. Mid-year conversions often create reporting gaps. Aligning the change with the start of your fiscal year keeps everything clean. If that date is too far away, there are ways to compromise, but planning ahead is best.

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4. How is payroll currently categorized?

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Does your payroll provider support departments or cost centers? Most major platforms do, but it is worth confirming. Department tracking mirrors class tracking. It shows which employees and payroll costs belong to each location. If we are implementing class accounting in the books, payroll should switch at the same fiscal boundary so everything stays coordinated.

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5. How are shared expenses divided between locations?

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Marketing, administrative salaries, and central office overhead often serve multiple locations. Are they split evenly, or based on a measurable factor like revenue or square footage? A fixed percentage rule keeps reporting consistent and prevents month-to-month guesswork. Review your MSA as well, since it may place limits on how expenses can be allocated.

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6. How is your MSO structured across locations?

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Some medspas use one MSO for all PCs. Others create a separate MSO for each PC. Both models work, but each one has different bookkeeping needs. A single MSO simplifies oversight and reduces accounting costs. Multiple MSOs offer flexibility but require more files, more reconciliations, and more intercompany accounting.

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7. How will income be received for additional locations?

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If you decide to create multiple Professional Corporations, each location will need its own merchant account to report revenue accurately and receive 1099s correctly. This approach adds operational cost but simplifies income recognition and reduces the amount of revenue confirmation your bookkeepers will need from you each month. Be aware that multiple PCs can also complicate tax preparation for your medical director.

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8. How will each new location be funded?

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Are you signing a lease, building out a suite, or starting construction from scratch? How will those build-out costs be funded? It might be a bank loan, an owner contribution, or the MSO advancing the funds. If the funds are personal, they appear as capital contributions or shareholder loans. If it is a business loan, it needs to live on the correct entity’s books. Getting this right keeps equity accounts accurate and prepares you for underwriting.

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9. How will new locations handle banking and expenses?

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Does each location need its own bank account and credit card? Separate accounts keep class accounting clean and prevent crossover charges. For expenses that cannot be separated, like marketing handled by the MSO, we will apply percentage allocations. Setting up vendor accounts and payment methods per location at the start keeps everything organized as you grow.

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10. How will your operations scale?

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Who is managing what, and where? Will you rotate between sites, operate remotely, or centralize administrative work under the MSO? Even two locations can overwhelm a single manager. Defining roles, schedules, and trusted staff early helps both financial and operational systems scale smoothly as you expand.

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Clarity Comes First

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Each of these ten questions leads to one outcome: clarity. Growth creates complexity, and without structure, your numbers stop reflecting reality. When your entities are clean, allocations are predictable, and reporting is organized, your books will not just keep up with your medspa. They will help run it.