Client Expectations and our Accounting Policies for Williams Group Financial (WGF)
This guide outlines what Williams Group Financial needs from you to provide accurate, timely, and compliant accounting services. It also explains details of your financial statements, what information we’ll request, and what you can expect throughout the year.
This guide is **NOT required to be read** as Williams Group will guide you through what is needed at every step and can be reached to answer any questions as they arise, with us thriving to respond to all communications within one business day. This guide is for those that may want a full understanding of our processes and details of how the financial statements are organized with details of each category used.
Table of Contents
- Financial Statements Overview
- Onboarding Process
- Ongoing Bookkeeping Requirements
- Year-End Requirements
- Tax Service Requirements
- Payroll Ongoing Requirements
- Send hours 2 days prior to payday
- Provide breakdown of type of hours
- Provide hours earlier when the payday or day prior is a holiday
- Provide new hire paperwork including
- Changes to employee deductions, pay rates, time off policy changes, or bank accounts
- Employees can access paystubs and make some changes using workforce.intuit.com
- Accounting Policies and reports explained
1. Financial Statements Overview
The financial statements provided by Williams Group Financial (WGF) display cash flow entirely on the **Profit and Loss (P&L) statement**. This cash-based format is designed for management purposes and is preferred by most optometrists and third-party analysts.
With this formatting you can expect:
- The net income on the P&L reflects total cash flow in or out of the clinic.
- Activity typically recorded on the balance sheet—such as loan payments and distributions—is included on the P&L throughout the year.
• These accounts are differentiated by ending with “**”. - Bank and credit card balances remain current on the Balance Sheet, along with payroll liabilities (if WGF provides payroll services).
- Other assets and liabilities on the Balance Sheet are updated at year-end for tax purposes.
• These are moved from the profit and loss with accounts starting with “**Reclass” that will only show at year end at the bottom of the profit and loss statement.
If a third party requests traditional financial formatting, contact wgfinancial@thewilliamsway.com and we can provide those statements.
At the end of this document will be our Accounting policies providing more details on the categories WGF will use when recording your transactions and everything else needed to understand your financial statements.
2. Onboarding Process
The onboarding phase typically lasts around one month but may go longer depending on past accounting needed. During this time, our team sets up your accounting system, integrates your financials into our cash-based format, and reviews prior records for accuracy.
During this time, we will:
- Provide weekly status updates with an estimated timeline for onboarding.
- Merge your financial data into WGF’s optometric-focused, cash-based reporting format.
- Review your historical financials for accuracy and consistency.
- Request your most recent business tax return to verify beginning balances.
- Address any discrepancies between reported and actual account balances by recording adjustments in the current year.
- Introduce your assigned lead accountant once onboarding is complete, with a list of any remaining items needed.
Bank & Credit Card Access
WGF requires access to all active bank and credit card accounts used by the business to ensure accurate and timely reconciliation. This information can be provided through the following methods:
- Third-party accountant access (preferred).
- Direct login credentials (used only when third-party access isn’t available).
- Monthly PDF statements sent by client (as a last resort; may delay reporting).
We store all credentials securely and use them only for accounting purposes. If you need assistance setting up third-party access, our onboarding specialist can help, or you may need to reach out to your bank representative.
Miscellaneous Tax Services
During onboarding, we will review any additional tax filing requirements based on your business location and will discuss whether you have these filings handled or would like WGF to complete them. If WGF handles these filings, we will request login credentials and copies of prior filings if not available online.
If WGF is asked to handle these filings after the registration was submitted without the services checked, we will send an email confirming they have been added to your account services. If we do not send an email confirming the change, and no email is received to request the services be added to your account, then it is expected that the client will be handling the related taxes moving forward.
These Miscellaneous taxes include:
- Business Personal Property Taxes – Equipment-based annual filings.
- Sales Tax – Regular filings based on your jurisdiction.
- Secretary of State Filings – Annual report compliance.
- Other Local/State Taxes – As applicable.
Payroll Information Needed During Onboarding When Engaging WGF
Generally, all of this information will be found within your prior payroll system, or your employee handbook, so receiving access to that is the first priority, and then we will provide you with a list of any details needed.
- Access to prior payroll software or contact information for your previous payroll provider.
- Employee handbook, including any paid time off policies.
- Details of deductions from staff pay (insurance, retirement, etc.).
- Employer-paid portion of benefit costs.
3. Ongoing Bookkeeping Requirements
Once onboarding is complete, minimal client involvement is required. However, it is essential to notify WGF of the following activities to maintain accurate financial reporting.
Notify WGF when any of the following activity occurs
Inform WGF when **vendor rebates or other non-patient income** such as funds from loans or grants are deposited into the bank account, as well as any **new financing activity**. We ask that these are deposited separately from patient deposits. These include the following:
- Vendor rebates or other non-patient income deposits.
- New loan or line of credit established.
- Asset purchases, trades, or sales.
Send notifications to wgfinancial@thewilliamsway.com with deposit details or any documentation related to loans or asset transactions.
Clarification on Transactions
WGF will request more details on the following items if we identify that more information is needed:
- Large asset purchases over $2,500 – provide receipts or loan documentation.
- Vague transaction descriptions – provide clarification when requested.
- Check details – if handwriting is illegible or images unavailable online.
Buying Group Purchases
If your practice uses a buying group vendor that you purchase multiple items from such as frames, lenses, and contact lenses, please provide monthly statements so WGF can properly categorize costs. We recommend you ask the vendor to include wgfinancial@thewilliamsway.com on statement emails. If this is not possible, statements may be forwarded manually by a clinic staff member. If statements are not received, purchases will be grouped under the ‘Consolidated Buying Group’ category.
Financial Review Feedback
We encourage clients to review their monthly reports regularly. If you identify any errors or inconsistencies, please notify WGF promptly so we can correct them and update internal procedures.
4. Year-End Requirements
At year-end, WGF requests specific information to ensure your balance sheet and tax filings are accurate. We will contact you each January with a list of items needed.
Additional payroll items – Must be submitted prior to year end
• S-Corp owner health insurance – If you are filing as an s-corporation and your health insurance is being paid by the company, then an equivalent amount of S-corp health insurance should be recorded on the paychecks. This should not be set as a deduction like it is with most staff, but instead uses a specific pay type so this amount is properly recorded on the W-2 as S-corp owner health insurance without it actually adding funds to your net pay. This inclusion allows for those payments to be deducted when filing your annual return.
Most clinics do not have a company vehicle as an asset of the business. If you just have a personal car, then this information will not be needed.
Loan Balances
We will ask for the principal balance of any loans as of the end of the year. If you only receive paper statements for your loans, these will typically be mailed to the clinic in January, otherwise the balances can be accessed online. WGF will send a list of any loan balances we require that we cannot access ourselves towards the start of January, and these balances can be sent to wgfinancial@thewilliamsway.com.
1099 Filings
If engaged, WGF will prepare and file 1099 forms for contractors who are paid over $600 via the clinic’s checking account. Vendors that may need a 1099 filed may include contract labor, cleaning services, professional services, or other non-incorporated entities.
- A vendor list will be provided in early January for your review with the 1099’s we believe need filed and the amount paid in the year.
- Confirm vendor information before January 30th to ensure timely filing.
- Forward W9 forms for all new contractors throughout the year to wgfinancial@thewilliamsway.com.
We encourage proactively requesting W9 information when engaging a new contractor to avoid needing to request this information at filing time.
Accounts Receivable & Inventory
If your clinic files on an accrual basis, provide AR and inventory balances as of year-end for tax reporting. A Cash-basis filer may disregard these items. If you are unsure if this is needed for your clinic, please reach out to us at wgfinancial@thewilliamsway.com and we can confirm your situation.
If WGF is not filing your tax return
We ask that your CPA does not make adjustments directly within QBO and instead inform us of changes needed. If your CPA books adjustments directly, it will interfere with the cash-based Profit and loss statements and make it to where we are unable to provide an accurate prior-year comparison going forward. Instead, we ask that your CPA send a copy of your filed business return once completed so WGF can ensure your results on your return match your business books. If they have any Adjusting journal entries, we will also record those.
5. Tax Service Requirements
If engaging WGF for tax services, please consider the following documents we will request for tax preparation, as well as what changes in the business we ask that you reach out to the tax team to discuss the implications of.
Timely & Complete Documentation
To ensure filings are accurate and on time, clients must provide all requested tax documents and questionnaires by the deadlines established each year. Examples include:
- 1099s, W-2s, K-1s, brokerage activity, payroll reports.
- Up to date business financial statements (accrual or cash basis).
- Mileage logs, depreciation schedules, loan statements.
- Practice-related documents such as equipment purchases, insurance changes, or ownership updates.
Note: If you do not use Williams Group bookkeeping, additional review time may be required to validate the accuracy of external financial statements.
Clear Communication of Changes
Clients must notify us promptly of events that may impact tax strategy, including:
- Ownership changes or partner/associate compensation updates.
- Large equipment purchases or financing.
- Opening additional locations or restructuring entities.
- Sale or acquisition of a business or real estate.
- Significant personal changes (marriage, dependents, relocations, investment activity).
If not engaging WGF for bookkeeping services
A quarterly review will be completed at the staff accountant’s hourly rate to ensure data being used for tax review and preparation is up to date and accurate. If you need any assistance with the corrections or ongoing accounting, we are happy to assist at our hourly rate, or you can reach out to pmcreynolds@thewilliamsway.com to discuss an ongoing bookkeeping engagement which also includes a 10% discount in tax billings.
6. Payroll Ongoing Requirements
Send hours 2 days prior to payday
We ask that the payroll information is sent by noon 2 days prior to payday or earlier. WGF can still make changes up to 4PM EST the day prior to payday, so sending it two days prior will allow us to process it early and give you and the staff time to review if any adjustments are needed.
Provide breakdown of type of hours
WGF is able to accept hours in a variety of formats so long as it lists the hours worked by employees and provides a difference in hour type, such as regular hours, overtime hours, and paid time off hours being listed separately for the employees. If there are any commissions or other pay that needs recorded that is not included on the time sheet, they can be sent in the body of the email when hours are provided to wgfinancial@thewilliamsway.com.
Provide hours earlier when the payday or day prior is a holiday
If a bank holiday falls on the day prior to payday, or the day of payday, we will need to receive the hours earlier than usual for processing as transactions will not start to clear on bank holidays.
- If a bank holiday is the day of payday, we will need the hours two days earlier than usual, so that the paychecks may be direct deposited for the business prior then the typical payday.
- If a bank holiday is the day prior to payday, we will need the hours one day earlier than usual, so that the paychecks may be direct deposited for the standard payday.
Provide new hire paperwork including
When a new employee is hired, we ask that the following documents are sent to our team at wgfinancial@thewilliamsway.com. Copies of blank forms can also be requested if needed.
- Pay rates and any deductions
- I9 Form
- Direct deposit information
- Federal W4 form
- State W4 form (If not provided, we will use zero adjustments for state withholdings)
Changes to employee deductions, pay rates, time off policy changes, or bank accounts
If an employee receives a new pay rate, begins a new deduction, or the staff has a change in their insurance policies, please forward this information to wgfinancial@thewilliamsway.com for our team to proactively update this information. This includes any changes to the owner’s health insurance policies as well.
If you or an employee is trying to max out your retirement deductions for the year and have recently turned 50 years old, please inform WGF as this is the current age that qualifies for a higher limit per year.
If you want to change the source bank account that the clinics’ payroll funds comes from, we will need to be notified at least a week prior to the next payday. Due to the timing of direct deposits, and some banks requiring a test deposit, switching the clinic bank account for payroll can take a few days.
Employees can access paystubs and make some changes using workforce.intuit.com
When a new employee is hired and set up for payroll, they will receive an email invitation to access their paystubs at workforce.intuit.com. With this access they can:
- View paystubs
- View W2 forms
- Update Federal and state withholding information
- Update address information
- Direct deposit information
WGF can also be notified of making those changes if you don’t want the staff to update them directly. The following items **cannot be updated by the staff**, so please notify WGF if any changes are needed.
- Pay rates
- Deductions
7. Accounting Policies and reports explained
We recommend reading the Profit and Loss breakdown below for a good understanding of where we categorize transactions. All cash-based activity will be posted to one of the categories in that section during the year and should be the primary report you review with your financial statements.
We will also provide a Balance Sheet report as well as a Statement of Cash Flows when providing you with full financial statements and have included explanations of these reports and categorizations below. If you ever have any questions on how we categorize transactions, or how to read your financial statements, please reach out to us at wgfinancial@thewilliamsway.com, and we will be happy to review with you.
Before financials are sent each month
Transactions are posted at least once a week for synced accounts to allow you to review up to date financial information before they are officially reconciled and sent after month end.
After a month end is completed, WGF will be double checking all transaction postings, reconciling bank and credit card statements, and looking up information for any checks or other uncategorized transactions. If we need any information from you, such as bank statements we may have lost access to, or new loan information, we will reach out prior to issuing financial statements to request these items.
If we do not receive the requested information prior to the 13th, then we will send a reminder of items needed when sending a draft of your financial statements. If there is a large amount of missing information, financial statements may not be issued until the missing information is received as we do not want you to review poor financial information that will be substantially updated.
Best Practices to keep your financials and taxes accurate
We require that you **do not pay personal costs through your business bank and credit cards** or notify us if that activity does occur. Personal costs examples include, personal meals, student loan payments, automobile lease payments, automobile costs such as gas not used for business travel, Auto insurance and repairs and maintenance, country club memberships, personal travel etc.
Keeping these personal expenses off the business accounts will help to keep your clinics’ operating net income figure accurate, and we assume all expenditures from business bank and credit card accounts are business expenses.
For further clarity, if you pay for personal expenses from your business accounts, we will still record these as expenses on the P&L. WGFinancial does not make personal vs. business expense judgement decisions, but rather assumes all expenses are business unless informed otherwise or if there are instances where an expense would not make sense for an optometric clinic’s uses. If not using WGF for tax services, your tax preparer and you will make the determination if an expense is tax deductible. WGF will not make that determination by posting expenditures to the distributions account at year end other than direct distributions, federal, and state tax payments that are clearly indicated as such.
Please also make sure that all handwritten checks are clearly written and have included a memo on what is being paid.
Profit and Loss report explained
WGFinancial Example: Profit & Loss (P&L) Cash focused report – Chart of accounts and Descriptions
**Reclassify to Balance Sheet:** Accounts ending with ‘**’ are accounts that include activity which will be moved to the balance sheet at year end for tax purposes. These are first maintained on the Profit and Loss (P&L) report during the year so your P&L and Net income can show all cash flow coming in or out of the business.
| Overview of P&L Report | ||
| Your P&L should be the main report used when reviewing your business's performance. It will include all cash based activity broken out so the net income can be used to see the total cash flow coming in or out of the business during the year, before the P&L is adjusted at year end for tax purposes. | ||
| Chart of Accounts P&L categories | Example amount | Description and details of categorization |
| **Reclassify to Balance Sheet | Accounts ending with '**' are accounts that include activity which will be moved to the balance sheet at year end for tax purposes. These are first maintained on the Profit and Loss (P&L) report during the year so your P&L and Net income can show all cash flow coming in or out of the business. | |
| Income | ||
| Accounts receivable adjustments | (3,000) | Only used as an adjustment account if Accounts receivable (AR) is recorded on the books. Standard WGF policy is to not record AR except if needed at year end for Accrual based tax filers. |
| Collected receipts | 1,000,000 | Collected receipts represent the income being generated from seeing patients as of the date the funds are received into the bank. If funds are deposited into the checking account, and it isnt a transfer from another bank, then we will assume they are patient receipts unless notified otherwise. It is the clients responsibility to notify WGF when deposits are made for vendor rebates, loan funds received, grants from the government, or transfers from accounts outside of the clinic. If depositing non-patient funds into the bank account, we ask that they are deposited seperate from the patient receipts instead of being combined on the same deposit slip. This will assist with the accuracy of your financial statements as all cash and check deposits will clear with the same description. |
| Refunds | (2,000) | All refund checks should have a memo clearly stating it is for a refund or an overpayment. The refund category used is for patient refunds, not for refunds the clinic receives from returned purchases. |
| Sales tax | 8,000 | Payments for sales and use tax. If WGF isnt engaged to process your sales tax, then we may reach out to identify these payments as they will clear with the same description as other department of revenue expenses including withholding tax or estimated quarterly state tax payments. |
| Total Income | 1,006,000 | |
| Cost of Goods | ||
| Clinical supplies and misc. cost of goods sold | 5,000 | Clinical supplies and products sold to patient that don’t fall into another category. This will commonly include nutraceuticals and medical treatment products. |
| Consolidated buying groups | 50,000 | If the client engages a buying group to purchase various different cost of goods sold, then these invoices will need to be sent to WGF each month if desired to be broken down. We recommend WGF be added to the invoice mailing list, or have a member of the staff forward the document by the 7th of each month. If the statement is paid in full and has a break down of vendors or cost of goods sold type, then WGF will break down the transaction into their appropriate cost of goods sold accounts. If the statement isnt paid in full, WGF will keep the transaction under a "Consolidated buying group" category unless there is a breakdown of what was paid. |
| Contact lenses | 60,000 | Payments to vendors that primarily sell contact lenses. |
| Doctor alliance fees | 10,000 | Fees for using a buying group or doctor alliance. |
| Frames | 80,000 | Payments to vendors that primarily sell frames and cases. |
| Inventory adjustment | (4,000) | Only used as an adjustment account if Inventory is recorded on the books. Standard WGF policy is to not record inventory except if needed at year end for Accrual based tax filers. |
| Lens & lab costs | 60,000 | Payments to vendors that primarily sell lens and lab related costs. |
| Vendor rebates | (2,500) | WGF should be notified if any rebates are deposited into the checking account. These funds should be deposited separate of any patient receipts. If vendor rebates are deposited with other patient receipts, or WGF isnt notified of the amount of the rebate, then they run the risk of being classified as collected receipts. |
| Total Cost of Goods Sold | 203,500 | |
| Gross Profit | 802,500 | Gross profit will represent your Income minus your Cost of Goods Sold. |
| Human Resource Costs | ||
| Wages, taxes, and benefits | Account used if not able to get a proper breakdown from non-qbo payroll system. | |
| Health insurance | 8,000 | The employer share of health insurance payments will be recorded to this account. If WGF is not processing payroll, or if there are individuals on the health insurance plan who are not on payroll, then WGF will need to be provided a statement to break out the health insurance appropiately. |
| Misc human resource costs | 200 | This may include uniforms, recruiting, or other payroll related expenses if able to be differentiated. Gifts for employees including gift cards or employee meals may go here as well if informed by the client, but cash bonuses should be recorded to wages. Meals must be provided for employees, while meals for employers will remain in the "Meals" section under non-operating costs. Headhunters, Indeed and other recruiting only sites go here. Facebook, twitter, linkedin, and other social media sites are presumed to be for advertising unless informed otherwise. |
| Payroll taxes | 15,000 | This account will represent the employer paid portion of payroll taxes. Employee deducted taxes will be under wages as part of their gross wages. |
| Retirement | 2,000 | The employer share of retirement plan payments will be recorded to this account. If WGF is not processing payroll, or if there are individuals on the retirement plan who are not on payroll, then WGF will need to be provided a statement to break out the retirement expense appropiately. |
| Staff contract labor | 1,500 | Checks written to clinic contractors should specify it is for contract labor so WGF can differentiate it from staff wages. If contractors are paid via Zelle or Paypal, WGF will need to be notified of these initially, and will make rules based on the contractor's name going forward. If contract labor is paid through the same system as staff wages, then WGF will not be able to differentiate these wages unless WGF is engaged for payroll. If the contractor payments are for an OD and it isnt evident based on the check memo or name, then WGF will need to be notified the first time for that contractor so we can move it and any future OD contractor payments to the appropriate account. |
| Wages | 200,000 | This account will represent the gross wages paid for the staff, not the net wages. This does not include any OD wages. |
| Total Human Resource Costs | 226,700 | |
| Marketing | ||
| Advertising | 100 | Website fees, custom prints, banners, marketing services, and social media payments will be placed here. This category will not include patient recall systems, as those will be categorized under "practice management software". |
| Donations | 100 | If transactions or checks are written to a non profit, club, school, or have a memo specifying a donation, then we will categorize as a donations. All other marketing efforts are to be categorized as advertising. |
| Total Marketing | 200 | |
| Occupancy | ||
| Property taxes | 3,000 | Property taxes on the building and land will be placed here. If the payments are for personal proeprty tax reporting assets other then the building and land, then personal property tax payments will be placed in misc. taxes. |
| Rent | 60,000 | Rent payments for the office space/building will be placed here. This does not include rented equipment or assets which will be under capital costs and debt services. |
| Utilities & misc. occupancy | 10,000 | Utilities, housekeeping, landscaping, snow removal, and small building repairs will be placed to this category. This will not include real property taxes, which will be in its respective occupancy category, or personal property taxes, which will be under misc. taxes under overhead. |
| Total occupancy expenses | 70,000 | |
| Overhead | ||
| Bank & credit card processing fees | 5,000 | This will include any fees from your bank or credit card for keeping accounts open and any fees needed to process customer credit card payments. |
| Billing service fees | 20,000 | This will include any 3rd party billing companies, as well as billing software such as Gateway and Apex Edi. |
| Computer, software & IT | 5,000 | IT services, small computer equipment purchases, and software uses will be included here. If an IT invoice is for combined services and equipment, the invoice will be placed here in its entirety. Assets do not need broken out from the IT services unless one piece of equipment cost more then $2,500. This will not include software for operating a website (categorized in adversting), billing service fees, patient recall systems(categorized in practice management software) or practice management software. |
| Insurance | 3,000 | We do not put any Health Insurance related, Life Insurance, or auto insurance costs here, but any and all other insurance go here, including workers comp, liability, mal practice insurance, business insurance; etc. |
| Licenses, education, & dues | 2,000 | Continuing education fees, business licenses, and association dues will go to this category. It does not include doctor alliance fees, which will be under cost of goods sold. |
| Misc. taxes | 500 | There may be small local or state tax payments that will go to this category that dont belong as payroll taxes, sales tax, real property tax and federal/state estimated tax payments, which will each have their own category. Examples may include Personal property taxes or Commericial activity tax. |
| Office expenses | 8,000 | This account will include any purchases from general retailers such as amazon, target, walmart, staples, etc. It will also include any smaller expenses under $500 that WGF is not able to easily identify. If the transaction is larger then $500, or occurs multiple times to the same vendor, then WGF will post to uncategorized expenses and ask for additional clarification. |
| Postage & delivery | 2,000 | Fees to ship products, including UPS, USPS, Fedex, and Pitney Bowes. Does not include shipping fees from purchasing cost of goods sold or other items received by the clinic. |
| Practice management software | 6,000 | Your practice management systems and any patient recall systems will be placed in this category. |
| Professional fees | 7,000 | This can include professionals such as consulting, accounting, and legal fees. |
| Repairs & maintenance | 3,000 | Equipment mainteance repairs/agreements and smaller office repairs will be categorized here. |
| Telephone & internet | 5,000 | All telephone and internet related expenses will be placed here. If WGF is notified of personal telephone and internet amounts being paid by the company, then WGF can differentiate the personal expenses to non-operating costs. |
| Total Overhead | 66,500 | |
| Uncategorized transactions | Any transactions that WGF is unsure of at the time of clearing will be posted to this account. This includes checks that WGF doesn’t have the check images for intially, or transactions that are awaiting clarification. | |
| Total Expenses | 363,400 | |
| Net operating income | 439,100 | Gross profit minus the four bolded operating expense sections above equals your Net Operating Income. Our calculation of operating income is not a conventional business operating net calculation because it omits compensation to doctors. Because owner doctors may compensate themselves based on factors other than their patient care work it is a generally accepted convention in independent medical practices to exclude doctor compensation from operating net income. Therefore, we record doctor compensation below the net operating income line. From this Net Operating income number, you can find a rough EBITDA calculation for your clinic by subtracting a standardized estimated doctor compensation of 17% of income. |
| Other income | ||
| Credit card rewards | 1,500 | Credits when redeeming credit card points or rewards for either a credit against the account, or to reimburse purchased items will go here. |
| Other income (Dont use, create seperate line depending on details) | 2,000 | If you have income that is not from seeing patients, is not a credit card reward, and is not a vendor rebate, we will create a new other income category depending on the situation. We ask that you inform WGF of any non-patient income so we can separate it from the standard patient collected receipts. This may include speaking income, proceeds from insurance policies, grants, or more. |
| Interest income | 500 | If you receive interest from a savings account or Certificate of deposit, the interest income will be placed here. |
| Total Other income | 4,000 | |
| Associate doctor earnings | ||
| Associate doctor wages | 8,000 | Gross wages for the associate doctors. |
| Contract doctor compensation | 13,000 | Payments to contract doctors who are issued a 1099 at year end instead of a W2. |
| Associate doctor healthcare | 5,000 | The employer paid portion of retirement contributions for both associate and owner doctors. |
| Associate doctor payroll taxes | 20,000 | The employer paid portion of payroll taxes for both associate and owner doctors. |
| Associate doctor retirement | 16,000 | The employer paid portion of retirement contributions for both associate and owner doctors. |
| Total Associate doctor compensation | 62,000 | |
| Capital costs | ||
| Amortization | 2,000 | Any amortization will be calculated by your tax preparer at year end. If this is not WGF, then we ask that your CPA provide a copy of adjusting journal entries or the filed tax return. |
| De minimis assets | 8,000 | Any asset purchases larger then $500 but less then $2,500 will be assigned to this category. The $2,500 threshold is subject to change if the IRS updates their definition of De minimis assets. |
| Depreciation | 3,000 | Any depreciation will be calculated and booked by your tax preparer. If this is not WGF, then we ask that your CPA provide a copy of adjusting journal entries or the filed tax return. |
| Computer hardware and software purchases - cash or cc** | Cash or CC purchases for Computer hardware assets valued at more then $2,500 will be placed here. If the equipment purchase is financed, then they will go to a seperate line item for the loan/lease. | |
| Medical equipment purchases - cash or cc** | 45,000 | Cash or CC purchases for medial equipment assets valued at more then $2,500 will be placed here. If the equipment purchase is financed, then they will go to a seperate line item for the loan/lease. |
| Leasehold improvement purchases - cash or cc** | 45,000 | Cash or CC purchases for Leasehold improvements valued at more then $2,500 will be placed here. If the equipment purchase is financed, then they will go to a seperate line item for the loan/lease. |
| Furniture and fixture purchases - cash or cc** | 45,000 | Cash or CC purchases for furniture and fixture assets valued at more then $2,500 will be placed here. If the equipment purchase is financed, then they will go to a seperate line item for the loan/lease. |
| Total Capital costs | 148,000 | |
| Debt services | ||
| Interest expense | 6,000 | At year end WGF will request the prinicpal balance on any loans. If provided, WGF will book an entry to tie in the prinicpal loan balance as well as interest to actual amounts for the year. Credit card interest will also be posted to this category. |
| Payee - Loan, operating lease, or line of credit payments** | 2,000 | If WGF sees a new loan or lease payment, we will create a new line item here for the payments (seperate line per loan/lease payment). If WGF is provided loan documenation specifying terms and what was purchased, WGF will then either keep the loan/lease on the P&L if it is an operating lease, or will book the loan and assets on the balance sheet if the business will own the asset, and will move the principal portion to the balance sheet at the end of the year. During the year, full payment amounts will be recorded here. If we see loan payments but dont have full documentation to book the loan, we will end the loan description with "NEED DOCUMENTATION". If it is determined to be an operating lease, we will indicate operating lease after the vendor name and will not end in **. |
| Automobile loan or lease payments (M-1 Adj) | 5,000 | Payments towards an automobile loan or lease will be placed here. If the automobile is deemed to be a business expense, then the loan payments may be recategorized to the balance sheet at year end if appropriate. |
| Total debt services | 13,000 | |
| Non-operating costs | ||
| Automobile | 2,000 | Any items related to the automobile will be placed here aside from loan/lease payments This includes gas station, repairs, parking, rentals, and insurance. If any transactions are not deductible, your tax CPA should be notified at year end to split these on the tax return. |
| Entertainment | 1,000 | This will include expenses strictly for entertainment purchases, such as tickets for sporting events, movies, etc. If it is possibly for a mixture of entertainment and meals, then WGF will default to placing in meals. |
| Inter-company transactions** | 15,000 | If multiple entities are owned, and there are either money transfers between the entities, or goods purchased on one entitiy's account that is used by the other entity, then such transactions will be recorded here. If a purchase is placed on Company A's bank account, but is used by Company B, then WGF will need to be notified of the situation so the transaction can be recorded under the appropriate entity. |
| Meals | 1,000 | Any meal purchases will be placed here if for either personal or staff meals. If you have a mixture of the two, you will want to inform your tax preparer at year end for a proper break out for tax deduction purposes. |
| Non-clinic operating costs (M-1 Adj) | 4,000 | If a purchase is made for an expense that doesn’t appear to be business related, and doesn’t fit into another of the other non-operating cost accounts, then it will be placed here. This may include items such as gym memberships, home related expenses, or grooming items. If the expense is made from a vendor that could be related to the business operations, then WGF will not categorize that here under the presumption it is business related unless notified otherwise. |
| Travel & accommodation | 2,000 | Flight and hotel purchases will be placed to this category. |
| Non-Operating costs | 25,000 | |
| Owner doctor earnings and tax installments | ||
| Distribution payments (line per owner)** | 80,000 | Funds transferred from the business bank account directly to the owner's personal account, or checks written to the owner. This will also include cash injected into the business from the shareholder if that cash is not part of a formal loan agreement. |
| Life & disability insurance (M-1 Adj) | 500 | Typically life insurance and disability policies will be for the owners only. An M-1 Adjustment may be needed to correlate with the tax filing. |
| Owner doctor healthcare | 5,000 | The employer paid portion of retirement contributions for both associate and owner doctors. |
| Owner doctor payroll taxes | 20,000 | The employer paid portion of payroll taxes for both associate and owner doctors. |
| Owner doctor retirement | 16,000 | The employer paid portion of retirement contributions for both associate and owner doctors. |
| Owner doctor wages | 500 | Gross wages for the owner doctors. |
| Personal Credit card payments (M-1 Adj) | 3,000 | If you pay down a credit card not indicated as a business card, then the payments will be categorized to this category. Payments against business cards will be classified against the liability on the balance sheet as the expenses were already accured on the P&L when they cleared the business credit card. |
| PTET-SALT payments | 15,000 | Some states and entities will be able to claim use a Pass Through entity tax (PTET), or state and Local tax (SALT) deduction to make installments towards the corporate tax returns. If you have not engaged WGF for tax services, then WGF will need to be notified if a payment is for PTET/SALT instead of a standard Federal or State Estimated tax payment. |
| State estimated tax payments & refunds** | 15,000 | Installments and payments for your personal or corporate state tax returns, or refunds if received. This does not include payroll taxes. |
| Federal estimated tax payments & refunds** | 40,000 | Installments and payments against your personal or corporate federal tax returns, or refunds if received. This does not include payroll taxes. |
| Total Owner doctor earnings and tax installments | 195,000 | |
| Reclassifications to balance sheet (Net to $0.00 with ** accounts in each section) | ||
| **Reclass capital costs | (135,000) | Some items will need to be recorded to the balance sheet at year end for tax return purposes, with the most common categories that will hold some of these expenses being marked with an asterisk. These items are maintained on the P&L throughout the year to give you a better representation of the cash flow, and their values will be moved at year end to the balance sheet with a Journal entry and an excel working document. |
| **Reclass debt services | (2,000) | |
| **Reclass owner doctor earnings and tax installments | (135,000) | |
| Total Reclassifications to balance sheet (Net to $0.00 with ** accounts) | (272,000) | |
| Net Income | 272,100 | Your net income will show your net cash flow in or out of the business during the year to give you insight into how much money the business is generating after all cash based income and expenses are accounted for. If when running reports through 12/31/20XX, and you see the Reclassification accounts, then net income will have been adjusted for tax purposes and that Net income amount will flow through to the balance sheet to the retained earnings account. At that point, your Net income will not be equivalent to net cash flow, but you can reference past reports or contact WGF who can provide that number for you. |
General notes to clients: If WGF is not engaged to process payroll, and payroll is not being processed within QuickBooks Online, then the breakdown of payroll will not be as in depth. If WGF is provided the estimated per payroll costs for the associate and owner doctors, we can split this amount out from the staff wages, taxes, and benefits. We recommend this number include the gross wages, employer taxes, and any employer paid benefits. If unsure of the average costs, WGF can be provided a payroll report from a standard payroll and can book the breakout based on the report. If WGF is not provided with payroll data, then doctor compensation will remain a part of Human resource costs above the operating income line. If WGF is not engaged to process corporate taxes, we ask that your Tax CPA provide WGF with a list of any adjusting journal entries instead of recording the changes directly in system. If a list of adjusting journal entries is not available, WGF can be provided a copy of the tax return to ensure the books match what was reported on the tax return. Items ending in (M-1 Adj) are identified as such for tax purposes. Schedule M-1 reconciles net income from what is stated on the books to what income and deductions re included on the tax return. E.g. if an amount on the books reduces net income on the books, but is not deductible, that book deduction is put on Schedule M-1 rather than deducted on the tax return.
| Overview of Balance sheet report | |||
| Your balance sheet represents your financial position on a particular day, e.g., 12/31/2025. It includes your assets, liabilities, and owner’s equity. With our focus on the Profit and loss rather than the balance sheet to show all cash related transactions, some accounts will not reflect updated balances during the year, but will be updated for the end of the year. | |||
| Chart of accounts Balance Sheet Categories | As of Sep 30, 2025 | As of Dec 31, 2024 | Description and details of categorization |
| ASSETS | |||
| Current Assets | |||
| Bank Accounts | |||
| Example Bank Checking #2324 | 125,000 | 33,000 |
Cash and Other current assets We record your transactions weekly and reconcile your bank accounts monthly, therefore your balance sheet will accurately reflect your current cash positions in your checking and savings accounts. |
| Example Bank Savings #2387 | 169,103 | 32,203 | |
| Total Bank Accounts | 294,103 | 65,203 | |
| Other Current Assets | |||
| Quickbooks tax holding account | If you use WGF or Quickbooks to process your payroll, you will see an account named "Quickbooks tax holding account" under your current assets. This account is where you will see the amount that QBO has withdrawn related to payroll taxes each pay period, and will be reduced when QBO makes the tax payment after the end of the filing period which depending on the tax may be after each payroll, monthly, quarterly, or annually. | ||
| Employee advance | 2,583 | 1,200 | |
| Inventory | 0 | 37,600 | We expense all inventory purchases to Cost of Goods sold when purchased rather than when the inventory is sold. We will adjust your inventory balance at year-end for tax filing purposes if needed. |
| Accounts receivable | 0 | 24,687 | We do not record monthly accounts receivable (A/R) because it inflates taxable income before the cash is received. A/R should be managed through your Practice Management system. If you want your A/R recorded on your financial statements, please let us know. |
| Total Other Current Assets | 2,583 | 63,487 | |
| Total Current Assets | 296,686 | 128,690 |
Cash and Other current assets We record your transactions weekly and reconcile your bank accounts monthly, therefore your balance sheet will accurately reflect your current cash positions in your checking and savings accounts. |
| Fixed Assets | |||
| Assets - depreciable | |||
| Computer hardware & software | 45,000 | 35,000 |
Fixed assets and depreciation These are the four core fixed asset accounts you will see on your balance sheet. We capitalize assets, (i.e., record asset purchases to the balance sheet) if the asset purchase is greater than $2,500. During the year, if a purchase is made with cash rather than financed, then it will first be placed on the Profit and loss, before being adjusted to the balance sheet after the year ends. If the asset purchase is less than $2,500, we classify these purchases to a de-minimis expense account on the P&L pursuant to the IRS de minimis safe harbor election. If the business enters into a capital lease for equipment, we recognize the full cost of the asset on the balance sheet along with the associated lease/loan commitment. |
| Furniture & fixtures | 45,000 | 24,000 | |
| Leasehold improvements | 24,500 | 22,000 | |
| Medical equipment | 115,000 | 86,000 | |
| Total assets - depreciable | 229,500 | 167,000 | |
| Depreciation - accumulated | |||
| Accumulated depreciation - Computer hardware & software | (25,369) | (20,586) | Depreciation will be broken down into accounts reflecting the seperate fixed asset accounts. These numbers will be updated after year end when WGF prepares your tax return, or calculated by your CPA if engaging a seperate firm. |
| Accumulated depreciation - Furniture & fixtures | (15,000) | (10,000) | |
| Accumulated depreciation - Leasehold improvements | (5,869) | (4,863) | |
| Accumulated depreciation - Medical equipment | (72,069) | (59,198) | |
| Total Depreciation - accumulated | (118,307) | (94,647) | |
| Total Fixed Assets | 111,193 | 72,353 | |
| Other Assets | |||
| Due from shareholder | 500 | 500 |
Other Assets Assets besides those listed above will often be under the other assets section. this is most commonly for intagible assets, such as goodwill. If the clinic is owed funds that were previously withdrawn, then you may see a "Due from shareholder" account here as well. |
| Accumulated amortization | (35,778) | (30,667) | |
| Goodwill or Non-compete | 227,444 | 230,000 | |
| Total Other Assets | 192,167 | 199,833 | |
| TOTAL ASSETS | 600,046 | 400,877 |
Total Assets Your total assets represents the combined total of all above asset values after depreciation, including your bank balances, assets owned, and any funds owed to the clinic through loans or payroll advances. |
| LIABILITIES AND EQUITY | |||
| Liabilities | |||
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Liabilities Any funds the clinic owes but has not been paid out will be represented as liabilities. |
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| Current Liabilities | |||
| Accounts Payable | |||
| Accounts payable | 12,660 | 1,225 | Accounts payable balances will not appear on your balance sheet with WGF unless you directly record bills and bill payments within Quickbooks Online. |
| Total Accounts Payable | 12,660 | 1,225 | |
| Credit Cards | |||
| AMEX cc #8642 | 52,171 | 53,857 | The clinic's business credit card balances will be shown as a current liability, with a seperate account for each credit card that can be connected to QBO and these balances will be kept up to date. |
| Chase cc #4329 | 101,022 | 81,195 | |
| Total Credit Cards | 153,193 | 135,052 | |
| Payroll Liabilities | |||
| Federal taxes (941/944) | 5,434 | 6,217 |
Payroll liabilities If you engage WGF for your payroll services, or if you process your own payroll within QBO, you will see these related liability accounts for each tax type and deductions. The funds for the tax liabilities will be withdrawn each pay period, but the liabilities will not reduce until QBO remits the payment. Health insurance and retirement liabilities are generally not paid directly through QBO, but funds are withheld from the employees paychecks each pay period for the company to remit. If you do not use QBO for processing your payroll, then these balances will generally not be up to date. |
| Federal taxes (940) | |||
| (State initials) withholding taxes | 2,385 | 1,729 | |
| (State initials) unemployment taxes | |||
| Healthcare liability - (vendor name) | 3,264 | 2,175 | |
| Retirement liability - (vendor name) | |||
| Payroll liability - (Vendor name) | |||
| Total Payroll Liabilities | 11,083 | 10,121 | |
| Total Current Liabilities | 176,936 | 146,399 | |
| Long-Term Liabilities | |||
| Shareholder Loans | 500 | 500 |
Long term liabilities Any loans that are expected to take more than a year to repay will be represented as long term liabilities. During the year, these balances will not be updated unless new financing activity occurs. The payments during the year will be expensed on the profit and loss under debt services, and then these balances will be updated to actual at year end for tax purposes. |
| Stearns capital lease #4523-01 | 46,412 | 50,796 | |
| Stearns capital lease #4523-02 | 22,860 | 26,140 | |
| Wells Fargo Loan #8573 | 299,136 | 311,088 | |
| Total Long-Term Liabilities | 368,908 | 388,524 | |
| Total Liabilities | 545,844 | 534,923 | |
| Equity | |||
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Equity The cumulative, residual claim of owners on the company’s net assets, shaped by contributed capital, retained earnings, and comprehensive income. |
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| Capital Stock | 100 | 100 | Capital stock will represent the par value of the company's stock. |
| Contributed capital | 1,500 | 1,500 | Contributed capital, or Paid in Capital, shows how much the owner directly put into the business to get it started. |
| Distributions - Member Name 1 | (125,500) | (99,500) | Any distributions that are taken by the owner in either direct cash withdrawals, or annual tax return payments, will be placed to this account after the year ends. These amounts will flow through to retained earnings as of 01/01 of the following year. If this amount is negative, you may be taking too much out of the business, while a positive number after a year is completed will show the amount that can be taken out further for S-corporations. |
| Distribution - Member Name 2 | (125,500) | (99,500) | |
| Retained Earnings | 146,885 | (72,900) | Retained earnings is the business’s cumulative profit over time minus any money taken out by the owners.If this amount is negative, you may be taking too much out of the business, while a positive number after a year is completed will show the amount that can be taken out further for S-corporations. |
| Net Income | 156,717 | 136,254 | The net income will flow directly from that net income on the P&L, and after the year is over, will be closed to retained earnings. |
| Total Equity | 54,202 | (134,046) | |
| TOTAL LIABILITIES AND EQUITY | 600,046 | 400,877 | |
WGFinancial Example: Statement of Cash Flows - Categories and Descriptions
January - March 2025
Overview of Statement of Cash Flows Report
The statement of cash flows represents your cash flow after all adjustments to the balance sheet balances in a period and reflects any financing activity. Your profit and loss will show almost all cash based activity for the net income line to show cash coming in or out of the clinic, however due to the timing of some items, such as credit card payments and payroll liabilities, this report will show a more detailed breakdown of the cash flow
| Overview of Statement of Cash Flows Report | |||||
| The statement of cash flows represents your cash flow after all adjustments to the balance sheet balances in a period and reflects any financing activity. Your profit and loss will show almost all cash based activity for the net income line to show cash coming in or out of the clinic, however due to the timing of some items, such as credit card payments and payroll liabilities, this report will show a more detailed breakdown of the cash flow. | |||||
| Accounts on Statement of Cash Flows | Jan 2025 | Feb 2025 | Mar 2025 | Total | Description and details of categories |
| OPERATING ACTIVITIES | |||||
| Net Income | 50,071.94 | (14,660.94) | (32,531.14) | 2,879.86 | This net income figure comes directly from the profit and loss for the period. |
| Adjustments to reconcile Net Income to Net Cash provided by operations: | |||||
| QuickBooks Tax Holding Account | 527.00 | 19.00 | (864.00) | (318.00) | |
| Example Credit card #1008 | 37,749.49 | 37,749.49 |
Credit cards On the Statement of Cash Flows credit card amounts represent the net activity between expenses and payments for the period. If this is a positive figure, then that indicates that amount more in expenses was accrued compared to what was paid in the period, while a negative number means you paid more debt off than was accrued on the card. |
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| Example credit card #1007 | (43,800.00) | 36,687.61 | (6,800.00) | (13,912.39) | |
| Payroll liabilities | 0.00 | 0.00 | |||
| Payroll liabilities:After-tax Roth 401(k) Catch-Up | 0.00 |
Payroll liabilities Any changes in payroll liabilities represents the net of what was accrued and what was paid, with a negative number indicating that more was paid than what was accrued for the period. For any payroll tax payments, there will be an equivalent total amount showing from the "Quickbooks Tax Holding Account". |
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| Payroll liabilities:Federal taxes (941/944) | 569.00 | (89.00) | (963.00) | (483.00) | |
| Payroll liabilities:Federal unemployment (940) | (42.00) | 108.00 | 99.00 | 165.00 | |
| Payroll liabilities:Healthcare liability - Aflac | (786.56) | 575.12 | 211.44 | 0.00 | |
| Payroll liabilities:Retirement liability - Edward Jones | (5,325.96) | (12,505.96) | 0.00 | (17,831.92) | |
| Total Adjustments to reconcile Net Income to Net Cash provided by operations | (48,858.52) | 24,794.77 | 29,432.93 | 5,369.18 | |
| Net cash provided by operating activities | 1,213.42 | 10,133.83 | (3,098.21) | 8,249.04 | The "Net cash provided by operating activities" takes your net income from your P&L, then adds or subtracts the net of any current liabilities such as credit cards and payroll liabilities. |
| INVESTING ACTIVITIES | |||||
| Assets - depreciable: Medical equipment | (28,000.00) | If any assets are financed during the year, you will see the purchased equipment show as "Investing Activities" and an equivalent total under "Financing activity", such as the $50,000 example loan below that was used to finance these purchases matching the total of the two assets. Any assets purchased with cash during the year will only show as of 12/31 after the year is closed and cash based activity moved to the balance sheet. | |||
| Assets - depreciable: furniture and fixtures | (22,000.00) | ||||
| Net cash provided by investing activities | $ | $ | (50,000.00) | (50,000.00) | |
| FINANCING ACTIVITIES | |||||
| Example loan #1001 | 50,000.00 | 50,000.00 |
Loan activity If a new loan is taken during the year, the balance will show under "Financing Activities" as a positive number. Loan payments will not show against this account until the end of the year, at which time the total principal payments for the year will show as of 12/31 as a negative number. |
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| Distributions - Member Name 1 | 250,000.00 | 250,000.00 |
Distributions and Retained Earnings
The changes in distribution shown in January are closing the prior year distributions with the adjustment to the retained earnings account. No other distributions will show here during the year as they will be expensed on the P&L until being moved to the balance sheet as of 12/31 for the year and will show as a negative number on this report
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| Distribution - Member Name 2 | 250,000.00 | 250,000.00 | |||
| Retained earnings | (500,000.00) | (500,000.00) | Any changes to retained earnings will show here, and will just show the distributions from the prior year being closed | ||
| Net cash provided by financing activities | $- | $- | $50,000.00 | $50,000.00 | |
| Net cash increase for period | $1,213.42 | $10,133.83 | (3,098.21) | $8,249.04 | Net cash increase (or decrease) will be represented here for each period after all balance sheet activity is considered. |