A Practical Guide To Dentist Accounting

The taxes saved will far outweigh the costs of hiring a bookkeeper for your dental practice. A dental accountant is someone whose job is to analyze and interpret the data created by the bookkeeper. They can look at your financial statements and other reports, make recommendations about spending or investing your money, and help you with strategic planning to meet your goals.

Everything is automated and presented in a detailed report using all available data in real time. DrillDown Solution helps dentists and small business owners reach the best financial position possible. Seychelle is a Maryland-based personal finance writer and business owner. She’s passionate about helping others out of financial pitfalls she’s already dug herself out of.

Accounting Challenges Dental Practices Face Every Day

Most outsourced services are not as customized which may be disadvantageous for your practice. Adhering to these easy accounting tips will significantly improve the possibility that your practice will thrive. Trust us, they want to do what they can to get your cash flow in a healthy place. Review your P&L statement month to month trends to see if you are meeting your goals but also to see where you stand compared to the industry. Long story short, you can obtain a ton of information from your P&L statement.

That makes it a hassle to get a clear view of the company’s financial status. And when it comes to your taxes, it complicates matters even further. They’ll need it to help you navigate the unique aspects of dentist accounting, like dental insurance and selling your practice. Every business is subject to the same fundamental accounting principles, but their applications vary significantly due to the nuances of each industry.

BRING YOUR OWN CPA

One of the most important aspects of running a successful dental practice is keeping track of your expenses. This can be a difficult task, as there are many different items that you need to keep track of. However, it is essential to track your expenses in order to maintain a healthy financial situation for your practice. One of the most common accounting issues for dentists we see is when they or their bookkeepers use a general chart of accounts or create an entirely inaccurate chart of accounts.

It is possible, but becomes difficult as you build your practice and strive to give your patients the highest level of care. We recommend finding experts because it will ultimately save you time. Your time is better spent managing your dental practice, seeing patients, and working on patient treatment plans. Although you may not have received training specific to business ownership when you were in dental school, your practice is a business. As the business owner, you are responsible for ensuring your business is run properly.

You’ll work with one dedicated bookkeeper, and they have a team of support behind them.

We’ll be glad to explain how our dental practice bookkeeping specialists can help you save time and money. The dental bookkeeping firm you hire will be responsible for tracking your cash flows and expenses and possibly managing your payroll too. Therefore, hiring a trustworthy firm with a good reputation is essential. They can provide all the dental practice accounting services you need at a much lower cost, including strategic tax planning, new business advisory, and tax preparation. Nowadays, all dental professionals should connect their business bank accounts and credit cards to solutions that can track their transactions and generate financial statements.

Providing care to your dental patients is a full-time job, so finding ways to outsource or delegate accounting tasks can be beneficial. As a dentist, you should focus on providing quality care while delegating the paperwork and financial tracking to someone who specializes in dental accounting. A professional bookkeeper or accountant familiar with dentistry can help ensure that all transactions are accurately recorded and reported.

To start, you should have bank accounts and credit cards set up specifically for your business, which should be in the practice name. It’s also likely you will have checking accounts and savings accounts. For all of these business accounts, each transaction will need to be recorded to accurately represent what is happening in your practice. Many financial dental bookkeeping systems have features that automatically synchronize with banks and credit cards. If you are using a financial system that offers this, the auto sync process will reduce the amount of time spent on data entry, especially in dental practices. If you’re like most people, the words “dental accounting” might not exactly make your heart skip a beat.

It is beneficial to have a CPA or virtual CFO who will look at your P&L statement with you, talk through your net income and help with cash flow, if needed. BookWerks™ is a cloud-based bookkeeping firm with its roots in Cincinnati, Ohio that provides assistance to businesses in a variety of industries throughout the country. From restaurants to dental and veterinarian practices, and everyone in between. If you’re a business owner who is still doing your own books, it’s time to STOP Bookkeeping and start BookWerking™. Hiring a dental bookkeeping firm to keep financial records and help you achieve your practice growth goals is a good investment.

Choosing A Generalist Accounting Advisor

That refers to everything necessary to keep your finances organized, make intelligent business decisions, and comply with tax laws. One of the biggest mistakes that dental practices make is not tracking their expenses. Tracking expenses can be done in a variety of ways, but consistency is the key to success.

• To start, you should have bank accounts and credit cards set up specifically for your business, which should be in the practice name.
• Your bookkeeper will also provide a year-end financial statement to help you plan the next year.
• I called almost in desperation one January 1st and spoke to Sona, explained my problem and soon I signed reluctantly because I had not been able to get my problem solved for many years.
• And human error accounts for most accounting mistakes, especially among inexperienced bookkeepers.
• For the first time, it wasn’t me who was pushing for perfection, but it was me who was being asked about my activity transaction by transaction.

If a bookkeeping firm refuses to disclose fees or hedges when you ask about them, you should continue looking for a firm that isn’t keeping secrets. Some firms may charge on an hourly basis and others may prefer to work on a monthly retainer. You’ll need to think about which services you need and what makes the most sense. You’ll need to ask any bookkeeping firm you’re considering hiring about what they do to protect their clients’ data. Here are some of the common measures you should expect them to use.

You won’t be on the hook for maintenance and repairs, and you’ll have the option to upgrade equipment when you renew your lease. Insurance — love it or hate it, the people of our country’s health depends on it. Unless you operate on a cash-pay basis, you must understand how insurance companies operate. Not understanding this process can be one example of accounting issues for dentists. The biggest benefit to dental bookkeeping is one that drives pretty much every business owner regardless of the field that they are in, profit. While things like accounts receivable, cash on hand, and Inventory are all categorized as assets.

Potential lenders want to see clean and precise financial data when they’re deciding to approve your business for credit. Nick Gallo is a Certified Public Accountant and content marketer for the financial industry. He has been an auditor of international companies and a tax strategist for real estate investors.

You can also increase your payments as your business profitability increases to pay down your debts faster. By providing dentists like you with prompt and proactive accounting, tax, consulting and financial planning services tailored to your needs, we allow you to focus on running and growing your practice. Especially when getting your dental practice off the ground, you need to stock your office with appropriate equipment that won’t push you further into debt. Instead, you should consider more expensive purchases over time when you truly have the cash flow available to cover the costs. Consider options to rent equipment to protect your cash flow and ability to run your practice.