A healthcare practice bills one party and is paid by another, often months later and rarely in full. The books have to make that gap visible or nothing else in them is trustworthy.
Revenue
Patient service revenue, and where relevant split by insurance against self-pay, because they behave completely differently.
Product or dispensing revenue where the practice sells goods.
Associate provider revenue where other practitioners work under the practice.
The collection gap is the defining feature
Billed is not collected. A claim is submitted, adjusted, partially paid, sometimes denied and resubmitted.
That makes collectible receivables far more important here than in a trade that invoices a homeowner. A practice reading billed revenue as income will consistently overstate what it earned, and the correction arrives as an ageing receivable ledger nobody can clear.
Days to get paid is the number to watch, and the benchmark is worse than other service businesses by a wide margin.
Cost of delivery
Clinical staff wages, clinical supplies, lab and imaging costs, and associate provider fees.
Associate fees behave like a variable cost where they are a share of collections and like a fixed one where they are salaried — worth separating for that reason.
Overhead
Premises, practice management and billing software, billing service fees, insurance, admin wages.
Billing service fees deserve their own line. They are usually a percentage of collections, which makes them one of the few overhead costs that scales with revenue.
Insurance
Professional liability, called malpractice here, is the policy that matters. General liability does not reach a clinical error.
What this setup gives you
Collected against billed, and the cost of collecting. Those two decide whether a busy practice is a profitable one.