NEMT Bookkeeping in 2027: Chart of Accounts, Payer Records, and a Monthly Close

Bookkeeping for a NEMT company is ordinary small business bookkeeping with three twists. Money arrives from several payers on different schedules. Payments often arrive smaller than the trips they cover, because brokers take back earlier payments and withhold penalties. And your biggest costs sit in a few vans that each need their own records. Set the books up for those three things on day one and the rest is routine.

What makes NEMT bookkeeping different

• Several payers. One van can carry Medicaid fee-for-service riders, three brokers’ members, a dialysis center’s patients, and private pay riders in a day. Each pays on its own cycle and under its own rules. See NEMT accounts receivable for the filing limits and pay cycles.
• Net payments. MTM Health’s standard provider agreement, in the January 1, 2023 version Pennsylvania posts, lets MTM recover overpayments by offsetting future payments (section 6.D) and withhold liquidated damages from sums it owes you (section 7.B). A deposit is often claims paid minus what was taken out.
• Hard deadlines. The same agreement pays uncontested invoices within 30 days of electronic submission, but refuses claims sent more than 90 days after the date of service, unless MTM’s client sets another limit (section 6.A). A trip nobody billed is lost revenue.
• Vans as assets. You need purchase, improvement, depreciation, and sale records for each van to figure depreciation and your gain or loss when you sell (IRS Publication 583).
• Trip records are financial records. Your Medicaid provider agreement requires you to keep records that disclose the extent of the services you provide, and to hand over those records and any information on payments you claimed when the state asks (42 CFR 431.107).

Set up your books before the first trip

1. Get your EIN and open a business checking account. IRS Publication 583 says to open one as one of your first steps, keep it separate from your personal account, deposit all receipts in it, and pay business expenses by check or transfer so each one is documented. Note the source of every deposit.
2. Choose cash or accrual. Under the cash method you report income when you receive it and deduct expenses when you pay them. Under accrual you report income when you earn it and deduct expenses when you incur them. You choose when you file your first return, and you must keep your books by the same method you use for taxes.
3. Choose single-entry or double-entry. Single-entry tracks income and expenses with a daily summary of cash receipts and monthly summaries of receipts and payments. Double-entry records every transaction in two accounts, so the books balance themselves and also show what you own and owe. Publication 583 notes that double-entry has built-in checks for accuracy, which helps once receivables, recoupments, and van loans pile up.
4. Set up your chart of accounts as shown below, with one revenue account per payer.
5. Add a tag for each van and each payer in your accounting system, so you can run profit by van and by payer.
6. Decide who does each job. The SBA’s list of what someone needs to handle: accounts receivable, accounts payable, available cash, bank reconciliation, and payroll.

If you keep books in software, the IRS still expects records that are legible, tie back to your source documents, and reconcile with your books and return. It also expects a description of your chart of accounts (Publication 583).

Cash or accrual for a NEMT company

	Cash method	Accrual method
A trip in December paid in January	Income in January	Income in December
What your profit report shows	Money that came in	Work you did, paid or not
Receivables	Tracked outside the books, on a receivables list	An account on the balance sheet
A trip that is never paid	No deduction, because it was never income (IRS Publication 334)	A bad debt deduction for the amount you included in income
Who can use it	Most owners. A C corporation, or a partnership with a C corporation partner, qualifies for 2026 only if its average yearly gross receipts for the prior three years are $32 million or less.	Anyone
Changing later	Generally needs IRS approval	Generally needs IRS approval

If you use the cash method, keep a receivables list anyway, so you still see what each payer owes. Decide on the method with your CPA before your first return.

A chart of accounts for a NEMT company

A chart of accounts is the list of categories your books use. Keep it short, but split anything you will want to see on its own later.

Group	Accounts to set up	Why keep it separate
Revenue	Medicaid fee-for-service. One account for each broker. One for each health plan. Facility contracts. Private pay riders.	Shows what each payer really pays and how much of your business depends on it
Takebacks	Recoupments, by payer. Liquidated damages and penalties withheld, by payer.	Shows what denials and late trips cost you
Vehicle costs	Fuel. Repairs, maintenance, and tires. Vehicle insurance. Registration and plates. Tolls and parking. Depreciation. Lease payments.	The actual-cost method on your return needs these totals by van
Driver costs	Driver wages. Employer payroll taxes. Contract drivers. Drug tests and background checks. Driver training.	Shows your true cost per driver hour
Overhead	Office staff wages. Other insurance, such as general liability and workers’ compensation. Licenses and permits. Dispatch and billing software. Phones. Rent. Accounting and legal fees.	Costs that stay the same whether a van runs or not
Financing	Interest on van and business loans	Deducted on its own line of your return
Balance sheet	Business checking. Receivables by payer, if you use accrual. Vans and equipment. Loans payable. Payroll taxes withheld. Owner’s equity and draws.	Shows what the company owns and owes

For a sole owner, Schedule C sorts these accounts into set lines. The 2025 form and its instructions put them here:

Your accounts	Schedule C line
Revenue from all payers	Line 1, gross receipts
Vans on the standard mileage rate: business miles times the rate, plus parking and tolls	Line 9. No separate depreciation, lease, or operating costs. Not allowed once you run five or more vans at the same time.
Vans on actual costs: gasoline, oil, repairs, insurance, license plates	Line 9
Van depreciation and section 179	Line 13
Van lease payments	Line 20a
Contract drivers	Line 11
Other insurance, not health	Line 15
Interest on van loans and other business loans that are not mortgages	Line 16b
Employer Social Security and Medicare, federal and state unemployment tax, and yearly licenses and regulatory fees	Line 23
Wages	Line 26

If your company files a partnership or corporate return, the lines differ, but the same accounts work. NEMT business taxes explains the mileage rate, depreciation, and which method each van can use.

How to record a Medicaid or broker payment

Post from the remittance, not from the bank deposit. The remittance says which trips were paid, which were cut, and what was taken back. How to read a remittance advice walks through each line.

Here is an example broker payment. The amounts are made up to show the entry.

Remittance line	Amount
62 trip legs paid	$2,480.00
Recoupment of a trip paid last month, missing rider signature	−$40.00
Liquidated damages for a late pickup	−$50.00
Deposit to your bank	$2,390.00

In a double-entry system, the entry looks like this:

Account	Debit	Credit
Business checking	$2,390.00
Recoupments, Broker A	$40.00
Liquidated damages, Broker A	$50.00
Revenue, Broker A		$2,480.00

Posting only the $2,390 deposit would hide $90 of losses you can fix. Missing signatures and late pickups have causes, and you cannot track what the books do not show. Under accrual, you record the revenue when the trips are done, and the payment clears the receivable instead.

Recoupments from an earlier year

A payer may take back money for trips you reported as income last year. IRS Publication 525 (2025) lets you deduct a repayment of income from an earlier year in the year you repay it, generally on the same schedule where you reported the income, which is Schedule C for most sole owners. For repayments over $3,000, you may be able to take a credit instead, so flag them for your preparer. See Medicaid recoupment for how payers recover money.

Trips that are never paid

Under the cash method, a trip that is never paid was never income, so there is nothing to deduct (IRS Publication 334). Under accrual, you can deduct it as a bad debt once it is truly uncollectible. Either way, mark it on your receivables list with the reason.

Retroactive rate changes

When a state raises a rate back to an earlier date, the payer reprocesses the claims and the extra money arrives as adjustments on later remittances. Post each adjustment to that payer’s revenue account and note the rate change. See how NEMT rate increases happen.

Card and app payments from private pay riders

If riders pay you by credit or debit card, your card processor sends you a Form 1099-K no matter how many payments you took or how much they were for. As of June 2026, a payment app must send one when payments for goods or services total over $20,000 in more than 200 transactions, though it may send one for less. You must report all business income either way. Match each 1099-K and any Form 1099 from a payer to that payer’s revenue account. See private pay NEMT.

Track every van and every payer

Profit hides in averages. A company can make money overall while one van loses it every month. Tag each cost to a van, then run a monthly report by van. Here is an example with made-up numbers.

One month, example numbers	Van 1, wheelchair	Van 2, ambulatory
Trip revenue	$9,200	$6,100
Driver wages and payroll taxes	$4,300	$3,900
Fuel	$1,150	$900
Repairs and tires	$250	$600
Insurance	$780	$780
Depreciation or lease	$900	$450
Profit before overhead	$1,820	−$530
Miles driven	3,800	3,100
Cost per mile driven	$1.94	$2.14

Cost per mile = total van costs ÷ miles driven

In this example, Van 2 needs better trips, a different payer mix, or fewer repair bills. The cost per mile calculator and profit per vehicle calculator run the same math with your numbers.

Miles need their own record. IRS Publication 463 asks for the mileage of each business use, the total miles for the year, and the dates, recorded at or near the time, and it counts a weekly log as timely. Publication 946 lists trip sheets among adequate records. Write down each van’s odometer at the start and end of every shift so empty miles are counted too. The mileage log and vehicle maintenance log cover both.

Your monthly close, step by step

Close the books within the first two weeks of each month, while the details are fresh.

1. Post every remittance for the month, by payer, with recoupments and penalties in their own accounts.
2. Post card and private pay deposits, and match them to the riders and trips.
3. Enter every bill and receipt, and file the paper or scan. Publication 583 counts sales slips, paid bills, invoices, receipts, deposit slips, and canceled checks as the supporting documents behind your books.
4. Reconcile each bank and card account to its statement. Publication 583 says to do this every month, and to fix bank charges or errors you had not recorded.
5. Match trips to claims. Every completed trip leg should be on a claim. Bill any that are not.
6. Review takebacks by payer. List recoupments, denials, and liquidated damages, and find the cause of each.
7. Check payroll. Confirm each tax deposit was made and recorded, and that withheld taxes sit in a liability account, not in your spending money.
8. Update the van list. Record any van bought, sold, or retired, and any ramp or lift work added.
9. Read your reports. Look at profit by payer and by van, and your balance sheet: cash, what payers owe, and what you owe.
10. Set aside tax money for your next estimated payment, then back up the books.

Records to keep and for how long

Record	NEMT examples	Keep at least	Rule
Income records	Remittances, deposit slips, card statements, Forms 1099	3 years after you file. 6 years if you leave out income over 25 percent of the gross income on your return. 7 years if you claim a bad debt. No limit if you never file or file a fraudulent return.	IRS Publication 583
Expense records	Fuel receipts, repair invoices, insurance bills, canceled checks	3 years after you file, with the same longer periods	IRS Publication 583
Van and equipment records	Purchase price, date placed in service, ramp or lift work, depreciation taken, sale price	Until the period ends for the year you sell or dispose of the van	IRS Publication 583
Mileage records	Odometer logs, trip sheets	With the return they support, and with the van’s records	IRS Publication 463
Employment tax records	Wages and pay dates, Forms W-4, deposit dates and confirmation numbers, filed returns, expense reimbursements	4 years after the tax is due or paid, whichever is later	IRS Publications 15 (2026) and 583
Wage and hour records	Payroll records	3 years	29 CFR 516.5
Time records	Time cards with daily start and stop times, and wage rate tables	2 years	29 CFR 516.6
Trip and claim records	Trip logs, signatures, claims, remittances	As long as your state and brokers require. MTM’s standard agreement requires 10 years, and Louisiana requires its broker to keep NEMT records at least 10 years.	42 CFR 431.107, your agreements

The IRS reminds owners not to throw out records that are no longer needed for taxes until checking whether an insurer or creditor needs them longer. For Medicaid, the longest rule wins. Electronic copies are fine for the IRS if they stay complete, legible, and retrievable. See NEMT trip documentation for what each trip record must show, and NEMT record retention for state periods.

Payroll and contract driver records

For employees, Publication 15 (2026) lists what to keep: your EIN, the amounts and dates of all wages, each employee’s name, address, Social Security number, and job, dates of employment, Forms W-4, the dates and amounts of tax deposits with their confirmation numbers, copies of filed returns, and records of expense reimbursements. Taxes you withhold from drivers belong to the government until you pay them over, so book them as a liability the day you run payroll.

For contract drivers, collect a Form W-9 before the first payment. For payments made after 2025, file Form 1099-NEC for each contractor you pay $2,000 or more in a year. That threshold may adjust for inflation from 2027. Before you treat drivers as contractors, read NEMT drivers: 1099 or W-2.

Small purchases: deduct now or depreciate

Securement straps, a tablet for a van, or a new seat belt extender do not need to be depreciated one by one. Under the IRS de minimis safe harbor, a business without an applicable financial statement, such as an audited one, can deduct amounts up to $2,500 per invoice or item, as long as it also expenses them in its own books under a policy in place at the start of the year. Your preparer makes the election on your return.

Vans are different. Their cost goes on your asset list and is recovered through depreciation or the mileage rate. Repairs that keep a van running are expenses, but the Schedule C instructions say amounts spent to restore or replace property must be capitalized. Keep the invoice for any ramp, lift, or engine work so your preparer can tell which is which.

Common NEMT bookkeeping mistakes

• Posting deposits instead of remittances. You lose sight of recoupments and penalties.
• One income account for everything. You cannot tell which broker or plan pays best, or how much depends on one payer.
• Mixing personal and business money. Every personal charge on the business card needs an explanation later.
• No costs by van. A losing van stays on the road for months.
• Throwing out trip logs after the tax years close. Brokers can require 10 years of records.
• Spending withheld payroll taxes. They are not your cash. See NEMT cash flow for building a reserve instead.
• Waiting until April. A month-end close turns tax time into a handoff instead of a rescue.

Set up your payer accounts and van tags this week, then post last month’s remittances into them. Your first monthly close will show you where the money goes.