7 Bookkeeping Tips Dentists Can Use Today To Make Managing Your Practice Easy

Accurate bookkeeping is crucial to keep your dental practice running smoothly! But with so many demands on your time, many dentists who own a practice struggle to stay on top of bookkeeping and accounting tasks. 

These helpful tips can help ensure no accounting task falls through the cracks, that your practice remains profitable, and you make informed decisions about finances for growing your business.

 7 Bookkeeping Tips For Dentists

1. Keep Separate Accounts For Your Professional & Personal Use

Combining your personal and professional accounts is seldom a good idea. For one, it overcomplicates the bookkeeping process and makes it nearly impossible for you to understand your real financial position. And when tax time rolls around, you’ll have to separate the two, creating additional work. Lastly, lenders may be less likely to approve business loans if your data isn’t clear, transparent, and separate. 

2. Create Monthly Financial Reports

Staying on top of your practice’s financials means you will have a clear understanding of how much is going in and out each month. This helps when it comes to tax time, preparing quarterly and yearly financial statements, and allows you to make sound financial decisions about your practice. Close or finalize your books each month and don’t go back and make changes.

3. Stay On Top of Deadlines & Due Dates

Missing crucial deadlines such as tax filing dates or making late payments can result in steep penalties and costly fines. In addition, it’s difficult to make financial decisions about your practice without the most current data. Incorrect information can cause you to spend too much or not enough, which could impact your practice negatively and jeopardize its future financial stability.

4. Understand Profit & Cash Flow

Do you know the difference between profit and cash flow? Cash flow is how much your practice spends and takes in during a specific period. Your cash flow statement can tell you how your practice is spending its money, so you can also understand how much cash your business is bringing in.

Profit is revenue, less expenses, for a specific period. In other words, it is how much you have left after you’ve paid all your expenses, but it doesn’t tell you how much cash you have available to spend. If you mix up the two, you could inadvertently spend money you don’t have and then incur overdraft fees or other charges.

5. Reconcile All Transactions

Confirm each transaction with corresponding paperwork such as a receipt, bank account statements, and accounts payable documents. Reconciling ensures you don’t incur overdraft fees or miss any fraudulent financial activity.

6. Accurately Account For Equipment Depreciation

Expensive dental equipment loses value during its lifetime. Accurately track equipment’s depreciation to ensure you are compliant with audit requirements. 

7. Hire A Professional Dental Accountant

Keeping track of finances in a dental office is an extremely time-consuming endeavor. You and your staff could better spend that time doing something else, like taking care of patients! An expert dental CPA can ensure your books are accurate and consistent so you can make sound financial decisions and grow your practice.

Related: 9 Reasons You Should Choose An Accountant Who Specializes In Your Industry

Chaliff + Associates: Your Dental Accountant In Memphis

The Chaliff + Associates dental accounting team can take the burden of dental practice bookkeeping off your plate. Our dental practice accounting experts provide experienced, sound financial management so you can focus on your patients and be confident that your finances are in good hands. Ready to learn more? Request a consultation with one of our dental accounting experts today!