You’ll need to use an industry-specific chart of accounts, reconcile financial data and make sure that the books are properly closed each month. In the end, a dental practice’s financial well-being depends on accurate dental billing. Dental offices that implement these billing best practices see less time spent on payments and greater assurance that they conform with industry norms. Dental offices that put a premium on precision, productivity, and patient education see higher rates of successful billing and happier patients. 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.
To avoid unnecessary accounting work, open separate business accounts before transitioning to practice ownership. Because dental education doesn’t prioritize financial management, it’s easy for new practice owners to make unforced errors. Fortunately, many of them are easily avoidable when you know about them in advance. Here are some best practices you should follow to minimize the interference of your dental accounting responsibilities in your day-to-day working life. All businesses need to know how they make money and where the money is spent.
Must-Know Bookkeeping Tips for Dental Practices
It is important that you sit down with your accountant and assess the areas that are dispensable and where you can optimize your costing. Cutting these extra expenses will help you organize your actual required costs much better. An efficient dental billing 101 system is vital to the practice’s bottom line. To avoid allegations of tampering, errors or incorrect information should never be erased or eliminated from the chart. Instead they should be struck out in such a way that the original notation is still readable. Electronic records must leave an audit trail that accomplishes the same result.
If you use the Home & Business version, both your personal and business finances are combined. Ingenious dental practice payroll tools that save dentists time and money. Here is a very important step often skipped by inexperienced dental bookkeeping bookkeepers. Formally reconciling every bank account, credit card and loan account on the balance sheet is a must to make sure you have everything recorded correctly such as no duplicates and no deductions missing.
Features are similar between the two, but with very distinct differences. QuickBooks uses a full chart of accounts with assets, liabilities, and equity accounts in addition to the income and expense accounts. The reports are all built on these available accounts and can be exported into Microsoft Excel® spreadsheet software for further analysis. 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.
Simple bookkeeping mistakes can cause a ripple effect that result in severe financial problems. However, most dentists are unaware of the proper steps to create and maintain an accurate bookkeeping system that allows them to understand the true financial health of their business. A number of accounting software systems are available for your practice, and it can be bewildering to know which one to use. Accounting software is a compliment to automated practices that use dental practice-management software.
Get Help From An Accountant Or Bookkeeper
Whichever way you decide is best for you, make sure your loan balance on the balance sheet matches the principal balance of your loan that the bank has for the specified period. There are some things to remember before you dig into bookkeeping because if you start to work and you have forgotten to do something a certain way, it could be quite the mess to go back and make changes. Therefore, at the top of our checklist, we list items that we need to remember before we start anything. We accept all major credit cards, Wells Fargo Health Advantage, CareCredit, and personal checks. If your insurance or group is not listed below, please call us and ask because we probably accept it. These are important distinctions that might be overlooked when using a standard COA as opposed to a dental industry COA.
- Dentist offices also have to follow the rules for billing and coding in their states.
- When a patient’s insurance is validated, the practice has insight into the patient’s financial responsibility for things like deductibles, copays, and coinsurance.
- Designed for small businesses, QuickBooks displays the practice’s tasks in a visual “icon” format.
- By recording the transactions, dental practice owners can track where their money is going and how much they earn.
- Another step that is often missed by inexperienced dental bookkeepers would be to reconcile payroll.
- Sound financial management begins with understanding the unique bookkeeping skills needed to effectively operate a dental practice.
- Having the right accounting team who understands the needs of your industry is the first step in that direction of accounting efficiency and an enhanced financial health.