6 Dental Accounting Tips

Use financial reports to identify and control unnecessary expenses. Implement cost-effective strategies without compromising the quality of patient care. Analyze financial dental bookkeeping reports to identify areas of growth and expansion. This could include introducing new services, expanding the patient base, or investing in advanced technology.

We promptly and efficiently handle all your bills and debts, giving you peace of mind that your practice can run smoothly and stress-free. How do you know exactly what was ordered for inventory – or whether it was enough – without digging out the invoices? Tracking inventory is an important component for practice budgeting. QuickBooks has an inventory solution available that Quicken does not provide. At a recent convention, a dentist walked into a QuickBooks® workshop and asked why he should use QuickBooks instead of Quicken®.

B. Tracking Insurance Payments

Dental Bookkeeping is a specialized company focused in bookkeeping for general and specialty practices in the dental industry. This is important to do every month so you have accurate numbers. And the QuickBooks Online reconcile feature will walk you through reconciling any account on your balance sheet.

• Cash flow visibility is important if your clinic requires capital to purchase new equipment or if you need to reduce your costs in anticipation of a period of restricted cash flow.
• They can help identify opportunities for deductions, credits, and other tax-saving strategies.
• Clear communication and regular updates from the outsourcing provider can address this concern.
• Dentists may feel a loss of control over the day-to-day bookkeeping processes.
• Like most consultants and accountants, I encourage dentists to keep a six-lane highway between business and personal finances, even if you are a sole proprietor.

Planning a business:

For example, dental practice management and payroll service software are essential tools for many dentists. Nowadays, all dental professionals should connect their business bank accounts and credit cards to solutions that can track their transactions and generate financial statements. You should review your dental practice’s finances regularly, preferably on a monthly basis. This allows you to monitor your progress, identify trends, and make informed decisions based on your financial performance. Outsourcing allows access to specialized bookkeeping professionals with expertise in dental industry practices. This ensures accurate and industry-specific financial management.

Evaluate the communication practices of the outsourcing provider. Clear and transparent communication is essential for a successful partnership. Concerns about data security may arise when outsourcing bookkeeping. It’s crucial to carefully vet service providers and ensure they have robust security measures in place.

An outsourced bookkeeping team will stay on top of the latest technological advancements, allowing your business to be as efficient as possible. No matter what you do for a living, the way you set up your billing schedule affects your bookkeeping needs. Do you have set fees for each insurance company because you’re an in-network provider? If so, do you have a fee for the service schedule that needs to be carefully watched and kept up to date so that you can stay competitive? You need good accounting management for your practice to be able to separate and match payments, whether most of your patients pay in cash or through insurance.

See if you’re eligible for business financing

You can make a budget and make smart choices about investments and spending after getting this information. A stable and profitable dental practice starts with good money management. Generally speaking, some business owners have a fairly good pulse on where their money is going.

A bookkeeper will focus more on the day-to-day record keeping of your clinic, while an accountant will focus more on tax preparation, forecasting, and advisory work. In the world of QuickBooks Online (QBO) and other products that make financial data entry much easier, this may not be a deciding factor for you. On the other hand, most dentists take comfort in knowing they have hired someone who does dental bookkeeping every day to handle their information. However, few practices need to hire a full-time dental accountant for their financial planning. Instead, you’re often better off paying for outsourced accounting and tax services from a Certified Public Accountant (CPA) firm.

Visibility on cash flow

Depending upon the amount of information needing to be updated and the changes within the software itself, it could present data compatibility conflicts if you become further behind. QuickBooks does require version upgrading annually if you use assisted or complete payroll services. Just be sure you choose one who’s had clients like you before, so they understand the nuances of accounting service for the dental industry. Here are some best practices you should follow to minimize the interference of your dental accounting responsibilities in your day-to-day working life.

A bookkeeping firm is trained and experienced in handling the specific needs of your dental practice. The right firm can help you keep your books current, run detailed and thorough reports, and even manage your payroll. Not only will this ensure that you always have access to the most up-to-date financial information, but it will also save you considerable time and money. Different dental practices may want to track different things depending on their unique business models. For example, your hygienist and dentist’s payroll expenses should go under the Cost of Sales. However, your receptionist and bookkeeper’s payroll expenses will be tracked under your overhead expenses.

Problems can also arise when a dental practice owner plans to sell their business at the end of their career. While that’s a long-term financial goal, it creates many accounting challenges regarding practice valuation and retirement planning. Dental schools are great at teaching prospective dentists how to care for their patients’ oral health. However, they don’t share the knowledge dentists need to be effective small business owners. Timely 4th quarter estimated tax payments are crucial to avoid penalties and maintain financial stability.

Bookkeeping is a chore – some might actually enjoy it, but others might view it as something they’d rather hand off. However, if dental accounting is viewed as a chore by dentists, it happens to be WCG’s chosen profession. Do you really miss hearing the beep of QuickBooks after each entry?