Accounting vs. Bookkeeping at Dental Practices: What Dentists Need To Know About Outsourcing

When dentists open their own practices, they do it because they’re passionate about doing good work for their patients—not because they want to spend time on bookkeeping and accounting.

For many people, bookkeeping and accounting mean the same thing. And while dental bookkeeping and accounting are both essential to running a practice, they are separate tasks each with unique responsibilities involved. 

So flip on the light and put on your dental loupes because we’re about to drill down to the definitions of these words and explore the differences between these two aspects of running a business. 

Let’s take a look at what makes accounting and bookkeeping different and how each one keeps your finances in order at your dental practice.

What are dental bookkeeping tasks?

Bookkeeping is the administrative work that concerns itself with financial recordkeeping. This is how you keep track of all your business transactions.

Bookkeeping tasks for dental practices includes: 

• Weekly/Monthly bank account reconciling
• Making deposits
• Withdrawing petty cash as needed
• Sending out bills to patients, including patients whose billing due date has passed
• Paying invoices to any vendors
• Reviewing your employees’ timesheets
• Processing payroll on a weekly, biweekly, or monthly basis
• Scanning receipts
• Tracking inventory
• Providing tax forms to the accountant
  

Related: How To Find The Right Tax Advisor For Your Small Business

 What are dental accounting tasks?

Accounting takes the information collected during the bookkeeping process and uses it to glean insights into your business’s financial health. 

For dental practices, accounting tasks include:

• Preparing and adjusting journal entries
• Analyzing expenses compared to revenue to look for ways to increase profits
• Reviewing monthly and annual financial statements
• Preparing monthly and year-end financial statements
• Performing audits
• Reviewing and then filing tax returns

If you outsource your dental accounting tasks, your accountant will also advise you on business decisions based on dental industry knowledge and financial records.

 SHould you outsource Your dental bookkeeping and Accounting?

You can’t afford to ignore any of the tasks on either list. Both bookkeeping and accounting play an essential role in keeping your business running, making money, and being compliant with state and federal tax laws.  

Many dentists choose to outsource their dental bookkeeping and dental accounting services because it frees them to focus on running their practice and serving their patients.

If you're trying to decide whether or not to hire an accountant or bookkeeper for your dental practice, this list of 4 questions will help you decide if outsourcing is right for your dental practice:

1. How much time do you spend on accounting and bookkeeping tasks? How could you use that time to grow your dental practice instead?
2. Do you often find yourself working on accounting and bookkeeping tasks instead of running your practice? 
3. Have you made any major mistakes in your accounting or bookkeeping responsibilities since opening your practice? If so, how much money has this cost you in the form of hourly work, fines, late fees, and lost revenue? 
4. How much easier would running your practice be if you could hand over bookkeeping and accounting tasks to someone who knows the ins and outs of financial record-keeping and dentistry?

Related: How To Do Dental Practice Accounting Right

Chaliff + Associates takes away the stress of dental accounting and bookkeeping

At Chaliff + Associates, we are proud to deliver the best accounting services in the Midsouth. We are ready to deliver exceptional customer service to owners of dental practices. We know the unique challenges and needs dentists face when it comes to juggling their passion for dentistry and the financial health of their practice. 

Schedule a free consultation with one of our experienced dental practice accounting professionals today. We know you’re busy, so we make it easy to pick the time and date that works for you! Click here to schedule your no-obligation consultation today!