Critical to the financial health of your dental practice is forming the habit of good bookkeeping and choosing a reliable bookkeeping software.
Successful small business owners in any industry will tell you that you should know how you are making money and how you are spending it.
Here’s the real deal: monitoring your financial data can be a real pain if you are still doing this manually with spreadsheets. No, you don’t want to be a financial advisor. But yes, you want to be a successful entrepreneur who runs a profitable dental clinic.
To cut a long chase short, aoose an bookkeeping software for your dental clinic that has the ability to provide you with valuable real-time insights. Moving into data-driven decision-making helps you make smart business choices and take you closer to achieving your business milestones. And when you start achieving your milestones, you are not too far from reaching the peak of success in your practice.
But many dentists remain clueless or probably confused about which bookkeeping software they should use for their dental clinic in the hopes of keeping their books accurate and correct to generate reliable financial reports. There is a roster of bookkeeping software available for selection in the market for dentists.
But QuickBooks is the one bookkeeping software that stands out for small business.
The moment you decide to automate your process, you should choose an bookkeeping solution that can complement your dental practice bookkeeping requirements:
Enable you to use dental practice-management software
Enable you to manage accounts payable to process payments for vendors
Enable you to facilitate general financial management
Why you should use QuickBooks
QuickBooks is an bookkeeping software designed for small businesses that offers all of the above dental bookkeeping prerequisites for a smoother dental clinic operation. Here are a few more reasons you should switch to QuickBooks:
Reporting. QuickBooks reporting feature makes use of industry-specific chart of accounts. The standard dental chart of accounts built in QuickBooks provides sections for all accounts including assets, liabilities, equity, and income and expenses making it easy to generate full reports of all accounts that is meaningful and timely. It also offers Report Finder feature, which allows you to generate report that helps determine if you are making or losing money.
Easy set-up. You don’t need bookkeeping knowledge to set it up and the back-end dashboard is formatted with easily recognizable icons. But if you want your financial reports done correctly and accurately right at the start, get some professional bookkeeping help.
Automation. Create budgets and track your dental practice inventory. There is no need to drown yourself in a pile of invoices just to analyze if you ordered adequate dental supplies. You can also control your expenses and analyze your target goals against actual reports.
Financial Advisors Review Tool. This small tool offered in QuickBooks gives you the ability to create a financial advisor's Copy of your accounts that you can send to your trusted financial advisor for analysis. Even while under analysis, you can continue your business transactions such as creating payroll, generating reports and writing checks for new purchases and updates your financial advisors copy in real-time.
Dental bookkeeping basics
How do you begin your dental bookkeeping?
Even if you are hiring a professional bookkeeping service, you should at least gain a little knowledge about dental bookkeeping to stay on top of your business finances. To start your journey in dental bookkeeping, it’s important you have a good understanding of the bookkeeping basics. Jumping right off the bat to navigate your way into an bookkeeping software without a clue on how you should execute bookkeeping tasks leaves a big hole of error that can be costly in the long-term for your business.
Here are a few basic things you should understand about dental practice bookkeeping:
Separate your personal checking account from your practice checking account. Avoid commingled fund. This fund is when you blend assets from different accounts and pool them together in a single account. While you can always take retroactive measures to correct mistakes in your book of accounts, commingling funds may get you some legal troubles when you expose your business to greater financial risks.
Keep your receipts. It's important that all your receipts are intact. FAS offers an innovative solution that allows you to capture receipts using the camera on your smart phone and log it as an entry under expenses in your cloud bookkeeping platform. This automated process takes away the headache of manual entries and keeping a virtual copy of your receipt to support your expenses.
Apply for a separate credit card that you will use exclusively for your practice transactions.
QuickBooks made easy for dentists
You would definitely want to get more out of the QuickBooks software.
Making sure you set it up correctly right from the start is crucial to keeping your financial records in good health. QuickBooks helps you organize your financial records and delivers meaningful reports to help your dental practice achieve greater heights in business success. But like any other programmed software, its intelligence is limited to the data you enter into the system (“garbage in, garbage out”) making it important that you know what you are doing if you are using QuickBooks to build a robust financial structure
Remember this: no bookkeeping software can take the place of any logical human who has instinctive knowledge about the business of dental practice and the underlying principles of bookkeeping.
If your clinic staff have no knowledge about QuickBooks, FAS offers QBO training that can equip your employees with professional knowledge on QuickBooks. Alternatively, for a growing dental clinic, you may need to hire a professional part-time bookkeeper to help you organize your financial data.
Watch QuickBooks ProAdvisor tips for dentists to help ease the process of navigating the QuickBooks bookkeeping software:
If you didn't watch the full video, here are the four important QuickBooks ProAdvisor tips for dentists you must not miss:
Smart Tip#1: Your loan payments should go to a loan account set-up as a liability account on your balance sheet, rather than to an expense account, so as to not overstate expenses.
Smart Tip#2: Transfers from one bank account to another should always be coded respectively, rather than to a “transfers” account.
Smart Tip#3: Office supplies should have their own account; so, they are not mixed in with dental supplies.
Smart Tip#4: Lunch with a referring doctor or a banker would be coded to meals and entertainment. Lunches brought in for staff during company meetings should be coded to staff meetings.