Over the last few years, I’ve watched independent practices wrestle with a quiet but growing dilemma—credit card fees. It’s not a glamorous topic, but in today’s reimbursement landscape, it’s an expensive one. And now, many practices are turning to credit card surcharging as a way to stay afloat.
I’ll be honest: I’ve always thought credit card fees were just part of the cost of doing business. But when your practice is at the mercy of insurance reimbursement—and those payments barely cover overhead, let alone payroll—there’s little room to absorb extra costs.
Credit card fees can easily eat into the already slim profit margins of a dental or medical practice. And while surcharging might not feel ideal, it’s becoming a necessary reality for some providers who are simply trying to keep their doors open.
But here’s where it gets tricky: if you’re going to surcharge, you must do it the right way.
Surcharging Without Accountability? You’re Just Trading One Problem for Another
If you simply collect a credit card surcharge and let it sit in your merchant account without proper entry into your practice management software—or worse, if it lands in your income line—you’ve created a new accounting mess. That surcharge now shows up as income, and unless it’s reconciled correctly, you’ll end up paying taxes on money that went straight to the credit card processor.
Let me say that again: if you don’t track this correctly, you lose your income either way.
It’s not enough to just start surcharging. You have to build accountability between your practice software and your accounts payable software, so that what’s collected is properly recorded, reconciled, and reported. That way, your income statements remain clean, and your cash flow reflects reality.
Here’s the Process I Recommend for Accountability with Credit Card Surcharging:
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Create a Debit Adjustment called “Credit Card Surcharge” in your practice management software. This is crucial—it has to live in the same system where you track collections.
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Enter the amount of the surcharge as a Credit Card Surcharge adjustment in the patient’s ledger. This increases the amount the patient owes without increasing production.
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Collect the full amount (services + surcharge) when the patient pays with a credit card.
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On the 5th of each month, generate an Adjustment Report from the previous month. This report will show the total credit card surcharge amount collected.
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Send that amount to your CPA or bookkeeper so they can enter a General Journal Entry (GJE) in your payables software. This moves the total from income to a Merchant Card Service Fee expense account, effectively reducing the deposited income and assigning it with the actual merchant fees.
When done this way, you maintain transparency, consistency, and alignment between your books and your collections. Most importantly, you don’t overstate your income.
And remember—this must be applied consistently to every credit card transaction. No favoritism, no exceptions. Many merchant services now support this type of surcharging, making it easier for practices to comply with regulations and offer full disclosure to patients.
Final Thoughts
I’ve been doing this work for 29 years, and I’ve never seen cash flow so tight across the board. Credit card surcharging isn’t a magic solution, and I’m still personally torn on it. But in today’s environment, we can’t ignore the math. If your practice chooses to surcharge, do it with integrity—and most of all, do it with accountability.
Your financial systems should serve your practice, not sabotage it.