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. Each field needs a different way of managing money that can be tailored to it.

• And to top it off, we can calculate profit distributions and year-end reconciliation of draws.
• Don’t hesitate to seek professional help if you need it, and remember that financial management is a continuous process that requires ongoing attention and effort.
• Another step that is often missed by inexperienced dental bookkeepers would be to reconcile payroll.
• Taxes and financial statements aren’t the only areas that could be affected.
• Not only do busy dentists enjoy reducing their time doing accounting, but focusing on your craft is in your business’s best interest.
• By implementing the best practices and tips outlined in this blog, you can streamline your finances, reduce stress, and focus on providing quality patient care.
• Dental practices are businesses, so you must understand the monetary aspects to run them well.

You might be running a larger dental practice, or the job is just too much to hand off to an office manager. Small business accounting software offers an affordable alternative. Most accounting software comes pre-loaded with a chart of accounts and tax guidelines so you don’t have to be a bookkeeping expert. A common misstep that happens in dentist bookkeeping is attempting to use a standard chart of accounts to track income and expenses. A standard COA doesn’t provide the same level of usefulness that a dental industry COA would have for your practice.

Close Your Books The Right Way

Failing to open a separate business bank account for your practice’s transactions is one of the most common ways dentists cause accounting problems for themselves. It makes it surprisingly difficult to distinguish which activities belong in which category later. The unique aspects of running a dental practice can complicate these processes. For example, accounting for your revenues properly despite the complexities of insurance billing can be one of the most significant challenges. Dental Bookkeeping is a dedicated to providing a smooth and stress-free bookkeeping experience for your dental practice.

Monitoring your cash flow can identify potential shortages ahead of time so you can deal with these situations proactively. You can obtain key invoicing and billing information from this software and export this data into your accounting software. Not only will it streamline the billing process, make things more efficient and eliminate the need for manual data entry, but it will also minimize the number of errors that you have. So while the earlier suggestion of adopting cloud-based dental accounting software is effective at cutting down on paper, it doesn’t eliminate the need to keep certain documents. Without the following documents stored safely in your records, you could face big problems. When making a dental accounting entry, it’s easy for all of the numbers to start running together.

Reconcile Bank & Credit Card accounts in QuickBooks

However, your receptionist and bookkeeper’s payroll expenses will be tracked under your overhead expenses. You may also want to consider tracking the revenue from each service you provide to analyze the profitability of each service line. The money you owe other people is called “accounts payable.” Whether that means patients, vendors, or the people who manage the property. As with your AR, this number will change over time based on your obligations, but if you pay close attention, it should steadily go down.

Dental practices have multiple options when it comes to determining their billing structures, and they have a significant effect on your overall business strategy and accounting processes. Here are some best practices you should follow to minimize the interference of your dental accounting responsibilities in your day-to-day working life. Even if you switch to a fee-for-service model, multiple moving parts in the dental payment process can quickly lead to messy financial records. We have been recognized as industry leaders offering a number of services for dental professionals.

Eight Bookkeeping Tips to Run a Successful Dental Practice

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 https://www.bookstime.com/ a different checklist for the end of the year when closing the books for the CPA to take over. Here at Bookkeeping for Dentists, every staff accountant must complete a monthly checklist for each practice they finish for month-end bookkeeping.

I can honestly say that the Percentology course will give you the knowledge and skills to finally get out the business owner hat and wear it confidently. It can help you see if you’re getting ROI with your marketing efforts. In fact, in 2022 alone, we saved dentists in our network dental bookkeeping over $1 million from potentially fraudulent charges. Dentists that do their own bookkeeping might miss important red flags, which can cost them thousands of dollars without even noticing. Your equipment is a fixed asset and should be depreciated over its useful life.

Helpful Tips For Dental Bookkeeping

Effective bookkeeping is essential to the success of your dental practice. As a dental practitioner, managing your practice’s finances can be challenging, especially if you’re not well-versed in accounting and bookkeeping. However, efficient financial management is vital to the success of your dental practice. We believe that your time is better spent on treating patients and building your practice and relationships than worrying about your finances and accounting issues! No more rushing at the end of the year to get your books ready for tax season.