Dental Bookkeeping is an exhaustive process and might take up a lot of effort and time. While it’s highly integral to maintain the financial health of your business, you may find it eating up a lot of your valuable resources and their attention from the primary tasks such as patient care.
However, the process could be easier if carried along with a strategy. Using the right tricks and tactics of bookkeeping, you cannot only keep up the financial health of your dental practice but also bring a blooming change to the other primary operations of your clinic.
Wondering what ways can help your bookkeeper maintain the books and contribute towards streamlining your dental practice accounting are?
Take a look at these and get inspired!
Do Not Mix Your Business Expenses With Personals
A very common mistake most businesses make when establishing is to mix their personal and business expenses. It might seem good to you in the beginning, but you’re definitely going to face the repercussions in the longer run. It will not just make it a complex thing to determine the financial health of your business. However, you might face even worse complications at times you’re filing taxes.
In addition to that, your financial data has to be presented in front of the lenders and investors. They are probably going to expect something professional out of your statements. And a mixture of your personal and business expenses illustrated in the books could really pose a negative impact.
If you presume that sorting out your personal and business expenses from a cluster is your dental bookkeepers’ job, you’re really doing it the wrong way. Their core job revolves around maintaining books and accounts of your dental practice. And the best you can do to help them keep a streamlined dental practice accounting in place is to avoid mixing up your personal finances with those of business.
It can be a win-win situation for you as it helps keep your finances healthy and poses a professional image in front of your investors.
Automate Your Experience
A very common reason why most bookkeepers have to spend tons of effort and time is the critical nature of their job. Since they’re dealing with numbers – they don’t have even the slightest leverage for errors. They need perfection, which calls for a lot of time and effort.
That’s not true anymore. Technology has brought great changes to the world, and with automation, bookkeeping could literally be made the easiest and quickest process. Multiple bookkeeping and accounting software and tools have been launched into the market. They come along with impressive features and could really help streamline your dental practice accounting and make the bookkeepers’ lives a lot easier.
The ideal way here is to pick a cloud-based accounting software for your bookkeeping. That way – you’d be able to easily connect and collaborate with the external bookkeepers even without them having to enter your practice for collecting data. Another good part of cloud-based software is integrating that with any other tool and getting the data merged, etc.
The more paperless and automation-friendly you’ll make your dental practice accounting processes, the easier it would get for your bookkeepers to maintain the accounts the right way.
Leverage The Dental Management Software For Excessive Data
Most dental management software programs come with amazing functionalities such as billing, tracking, inventory management, etc. That could be really helpful in accessing crucial billing and invoicing information and exporting it to your accounting software.
Not just that it will help streamline the dental billing process, it would also help your bookkeepers in a ton of ways. From the excessive time it takes to enter the data manually to the critical calculations – all of them could be saved with the help of automated software.
In addition to that, it can also help minimize the errors in bookkeeping and make your dental practice accounting the most efficient. If you really want to help your bookkeepers streamline the processes, adapting to such dental management software and leveraging their data extraction features could be a perfect way out.
Set Your Chart of Accounts The Right Way
As you set up the accounting software for the first time, it would give you access to a general chart of accounts. That’s often a very basic view of your finances. However, if you want to see a more detailed and insightful view of your finances – you can always arrange these charts of accounts the way you want.
An adequately put chart of accounts can help you take a closer look at your finances. You would be able to track, measure, and respond to the most critical financial factors of your business and move towards much improved financial health.
A primary reason you should update the chart of accounts in your accounting software is that different businesses have different requirements. A standard chart of accounts cannot fulfill the needs of every business or dental practice. The more closely you customize these charts of accounts in compliance with the needs of your dental practice, the clearer your financial health will appear on the face.
For instance, your dentist’s and hygienist’s expenses may be listed under the cost of sales. While the receptionist and bookkeeper’s payroll expenses should definitely be charged under the overhead costs. Also, you may want to track down the revenue earned from each service to determine profitability, which calls for setting up a separate account.
The best way to do this is to analyze the financial areas and aspects of your practice that you’d want to keep track of and create charts of accounts in alignment with them.
Keep Track of Your Cash Flow
Most dentists tend to confuse cash flow with profits. They also think that their profit is the excess cash and could be spent on different purchases. However, both these assumptions are quite wrong.
Cash flow is something that represents the incoming and outgoing cash of your business. It has to be monitored and tracked regularly to determine whether your practice has enough cash to bear all the expenses. Keeping a continuous track of your cash flows can help identify a potential shortage before time so you can take good measures and do the needful to prevent that from happening.
The better you’ll track the cash flows, the less they’d fluctuate. And that would eventually lead towards an easier dental bookkeeping effort and a streamlined dental practice accounting.
Keep Your Equipment and Depreciation Under Observation
If you’re running a dental practice, it must have some very expensive equipment. How do you state the expense of this equipment in your books? If you’re stating their expense when you purchase – you’re definitely on the wrong foot.
Equipment is a fixed asset that is meant to depreciate over time. The best way to tackle this is to keep track of your equipment’s depreciation. It will help you stay in perfect alignment with the audit requirements and make it easier for the bookkeepers to maintain the right books and accounts.
Setup A Central Tracking System For Multiple Locations
If you’re running a dental practice from multiple locations, it could be really difficult to keep track of your finances. Setting up a consolidated view of your operations from different locations can only put you into more trouble.
The best way you can handle this situation is by setting up a central tracking system for all your locations. Most accounting software programs come along with great functionalities that can help you form classes for each location and overview the data at a single platform yet classified in an adequate manner.
Consider Hiring A Dental Bookkeeping Professional
Though the above-mentioned ways are great to help your bookkeepers streamline their dental practice accounting; you might feel overwhelmed by the amount of effort and time it requires. The bookkeeping operation at dental practices is often handled by the receptionists or general office staff. Neither they have the right expertise nor the time to really grasp the criticality of this job.
If that’s the case – considering hiring a dental bookkeeping professional could be a great option. DentalRevu is a leading provider of dental bookkeeping services, with all the top industry specialists hired in the team. They can help you set up great books and accounts and maintain them the righteous way.
With all the years of experience and knowledge at hand, we take pride in serving all the specific needs of our clients. Whether you’re a startup dental practice with very few accounts, an established one with a bulk of accounts, or someone who’s recently transformed from manual to automated bookkeeping – the experts from our team can help do it all.