Employer billing has three lists that should agree: the employer's census, the members you billed, and the payment that arrived. Match them every month. Small differences are easy to fix in the month they happen and hard to untangle six months later.
The three lists
- The census: who the employer says is eligible and enrolled.
- Your billing: who you invoiced, at what rate.
- The payment: what the employer paid, and for which invoice.
Step 1: census to billing
Before invoices go out, check every name on the census against your billing list. Each difference should be a named change: a new hire, a departure, a coverage change or a dependent added. A consistent census format makes this fast.
Step 2: billing to payment
When the payment arrives, match it to the invoice. If the amount differs, find out why before you record it.
In a made-up example, you invoice $3,500 for 50 members at $70. The employer pays $3,360. That's $140 short, or two members. Ask which two members they left out and why. They may have left the company. They may be a mistake on the employer's side.
Step 3: record it correctly
- Apply the payment to the invoice in your books.
- If it's short, leave the balance open until it's resolved, or record a credit if you agree.
- Don't record the short payment as payment in full.
Keep a change log
Keep a simple log for each employer: date, member, change, effective date and how it was billed. When an employer questions an invoice months later, the log answers it.
At the monthly close
Your bookkeeper should check that employer A/R matches the open invoices, and that every payment landed on the right employer. Here's what happens in a monthly close.
What I'd do this week
- Compare last month's census, invoice and payment for each employer.
- Start a change log for each employer.
- Ask about any short payment from the last 90 days.
Common questions
Who should do this reconciliation?
Whoever builds the invoices checks the census. Your bookkeeper matches payments and reviews A/R at the close.
What if the employer's list and mine never agree?
Pick one source of truth in the contract, such as the employer's census, and bill from it with a set deadline.
How long should this take?
It depends on how many employers you bill. Time it once the format is set.
Want employer A/R checked at every close?
We reconcile every account every month and send your P&L and Balance Sheet by the 15th, so decisions like this start from real numbers. If that's what you need, apply to work with us.