The Role of Accounting and Bookkeeping in Dental Practice Management: Best Practices and Tips

QuickBooks comes with its payroll built in and is easy to set up and use. As a result, you’ll likely have high fixed costs, and you must be careful to avoid cash flow issues. In many cases, it makes sense to bring the bookkeeping process in-house. It’s usually straightforward enough to have one staff member handle it with other administrative dental bookkeeping tasks like scheduling. Fortunately, you can automate those functions with accounting software.

QuickBooks uses a full chart of accounts with assets, liabilities, ad equity accounts in addition to income and expense accounts. Creating a budget can help you plan for expenses and avoid overspending. Identify your revenue and expenses and allocate funds accordingly. Be sure to adjust your budget regularly based on changes in your practice’s financial situation.

Reconcile Bank & Credit Card accounts in QuickBooks

When you open your dental practice, you become responsible for your dental practice accounting. That refers to everything necessary to keep your finances organized, make intelligent business decisions, and comply with tax laws. Opening your dental practice is exciting, but it comes with a significant increase in accounting responsibilities. Most dentists prefer to focus on client work rather than business management, but you can’t afford to neglect the function. Seek references and read reviews from other dental practices that have utilized the services of the provider. Positive testimonials and feedback indicate a reliable and reputable service.

Leverage your dental management software for data

Accurate financial statements serve as the foundation for understanding the financial health of a dental practice. Generating these statements involves compiling data in a structured format, providing a snapshot of the clinic’s performance. Seek tax professionals with experience in working with dental practices. Their industry knowledge allows for a better understanding of specific deductions and compliance requirements. Bookkeeping is a powerful tool for driving the growth of dental practices.

QuickBooks is faithful to produce a new version annually, but you only need to upgrade your version every couple of years.
Dentists are rarely excited by the prospect of financial concerns interfering with their craft, but you can’t afford to ignore that aspect of your responsibilities.
Benchmark your practice’s financial performance against industry standards.
For example, your hygienist and dentist’s payroll expenses should go under the Cost of Sales.
This could include introducing new services, expanding the patient base, or investing in advanced technology.

I’m always surprised at the number of times I am asked this question. Let’s discuss the important differences to clear up the confusion. Apply for financing, track your business cashflow, and more with a single lendio account.

Effective bookkeeping plays a central role in achieving these financial milestones. Implement regular reconciliation processes, including bank reconciliations and insurance claim reconciliations. These processes help catch errors early and maintain the accuracy of financial records. Choose professionals who prioritize compliance and stay updated on changes in tax laws affecting dental practices. Maintain a streamlined process for reconciling insurance payments.

Quality CE is essential to create a successful fee for service practice

With years of training and expertise, we know how to help your practice achieve greatness. It is always advisable to have a paperless workflow process in place. Storing all of your documentation in the cloud makes it easily retrievable and ensures everything is kept safe and secure. There are several software programs and apps that you can use to help streamline your clinic’s operations and make things run more efficiently.

Download these documents and save with bookkeeping records

Effective cash flow management is vital for the day-to-day operations of a dental clinic. It ensures the clinic has enough liquidity to cover expenses, invest in growth, and weather any financial challenges. When you outsource your bookkeeping, you can save significant money for your dental practice.

Bank reconciliation is the process of matching your clinic’s financial records with bank statements. This practice ensures that your records accurately reflect your actual financial position. The chart of accounts is the backbone of your dental clinic’s financial structure. It provides a systematic way to categorize and organize your financial transactions, offering a clear overview of your clinic’s financial health.

Monitoring your cash flow can identify potential shortages ahead of time so you can deal with these situations proactively. Many of the newest dental management software programs, like ClearDent, now include crucial functionalities like time tracking, billing, and inventory management. Consider how frequently your insurance pays you and how many patient bills are still unpaid. As time goes on, your AR grows when insurance companies or patients don’t pay the full amount that’s owed.

Here’s a closer look at why keeping your clinic’s financial records in order is key to long-term success. There is a lot to consider when keeping your dental practice bookkeeping correctly up-to-date. This checklist breaks it down with important steps you can you follow and build on as you work through your own bookkeeping each month and year. We have a different checklist for the end of the year when closing the books for the CPA to take over. For example, one important rule in our bookkeeping process, (but so rarely followed by almost every practice that comes to us) is each and every transaction in QuickBooks needs a vendor name.

That’s why we offer a free hidden growth report to help dentists find tens of thousands of dollars in immediate revenue potential. We maintain all your accounting files with back-ups of each file. We’ll also keep records of all deposits made and monitor timeliness and accuracy of each deposit. If you need us to order banking supplies, we can help with checks, deposit slips, endorsement stamps and more.

Bookkeeping can be one of the most time-consuming aspects of small business accounting when you do things by hand. Fortunately, modern cloud-based software has made that entirely unnecessary. Not only do busy dentists enjoy reducing their time doing accounting, but focusing on your craft is in your business’s best interest. Maximizing the hours you spend on your core competency is highly beneficial to your profitability. Regular auditing and reviews of bookkeeping records are crucial for identifying discrepancies, ensuring accuracy, and maintaining financial transparency.

The Role of Accounting and Bookkeeping in Dental Practice Management: Best Practices and Tips » My Dentist Hub