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The Most Common Dental Bookkeeping Errors | Dental CPA

Simple accounting mistakes can cost dental practices hundreds or even thousands of dollars. In the following paragraphs, our dental accounting firm will provide a list of the top dental bookkeeping errors.

Keeping track of transactions from a previous period

Each month, dental practices should “close their books,” which includes reconciling all of their accounts and preparing financial statements. In addition to catching major mistakes, closing the books on a monthly basis can also help practices avoid discrepancies between financial reports and balance adjustments. These discrepancies can lead to a variety of problems and even incur penalties from the IRS. The problem can be easily fixed by closing the books every month.

Choosing not to use an industry standard chart of accounts

A chart of accounts shows how money or credit is spent or received for each type of item. For dental firms, this will include a list of clients, insurance companies, office expenses, payroll, and more, all with their corresponding expenditures. A chart of accounts specifically designed for the dental industry can help firms better manage their accounts, streamline expenses, and determine how to increase profits.

Misconceptions about cash flow and profit

A dental firm’s profit and cash flow are separate and unique entities, and understanding each is vital to success. Profit is calculated by subtracting total expenses from total revenue. Profit does not necessarily indicate there is cash available for large purchases; the cash flow statement determines this. A dental practice’s cash flow is determined by its cash flow equation, which factors in receivables, inventory, and depreciation expenses.

Misclassifying personal expenses and distributions

It depends on the structure of their practice whether dental practitioners take a salary or receive regular distributions. As cash distributions are neither salaries nor payroll, they should not be included in the firm’s expenses. It is possible for a company to underpay its taxes if distributions are not properly classified. Personal expenses, such as estimated taxes, food and drink, entertainment, and similar expenses, are not tax deductible and should also be recorded as distributions.

Choosing an accountant for general practice

Since dentists are specialized practitioners with specific needs, shouldn’t their CPAs specialize in dental professionals’ needs as well? Our dental accounting firm focuses solely on serving the accounting needs of dental practitioners and their firms. As a result, dental firms can avoid costly mistakes, maximize profits, and ensure practitioners receive the specialized assistance they need, whether during tax season or year-round. Contact our dental accounting firm today for more information.

ADCPA
Url: https://adcpa.org/

What Can a Dental CPA Do for Your Practice? | Dental Practice CPA Near Me

Why should I work with a dental CPA instead of a traditional, general CPA? By utilizing the skills and knowledge of a dental CPA, you’ll be able to manage your practice more efficiently, so you can devote more time to dentistry and become more profitable.

You can gain valuable information about the health of your practice from a dental CPA, get assistance with planning to ensure that you will achieve your personal and professional goals, and get excellent advice on how to improve profitability from a dental CPA firm.

The three main areas of focus for a dental CPA when setting up a new client relationship are:

A solid bookkeeping system

The first step in working with a dental CPA is to get your bookkeeping in order. While this is the most basic service that a CPA can provide, a dental CPA’s industry knowledge can help ensure that the information is presented clearly and in a useful way. You can arrange your accounts so that the important information is prominent and easy to compare.

Your dental CPA will also make sure that accounting principles are being applied correctly to your bookkeeping so that an outside agency looking at your books will not question the practice’s presentation or health. Many dental CPAs offer monthly bookkeeping services along with monthly or quarterly meetings to review financial statements, so you can understand and act on the information. Dental CPAs provide a wide range of services, but bookkeeping is the foundation of all of them.

Dental Practice Planning and Projection

Developing a long-term plan and making projections is crucial for your practice’s success. Planning and projections can be done by a dental CPA to ensure that your practice is on the right track and on track to meet your goals. Due to their familiarity with the collections and expense patterns experienced by dentists, dental CPAs are generally better equipped to make accurate projections for your practice. Having created a reasonable projection, a dental CPA can assist you in determining your initial plans or executing existing ones.

The three things most dentists want to plan for are taxes, retirement, and the education of their children. Are you utilizing tax strategies to minimize your taxes? Will you be able to retire comfortably and on your own terms? Will your children and grandchildren (if you have any) be able to attend college?

Services provided by dental CPAs

The majority of consulting services provided by a dental CPA will be in conjunction with other services. For example, during a quarterly bookkeeping meeting, a dental CPA will typically review your monthly or quarterly statements in order to assess the profitability of your practice and identify areas for improvement or investigation. During half-yearly planning, a dental CPA may review your fee schedules with you to ensure that you are not undercharging or overcharging.

During year-end planning, a dental CPA might discuss equipment and expansion plans with you to ensure that your capital investment will result in a healthier practice and more enjoyable dentistry for you. As a result of this type of consulting, your dental CPA can help you identify trouble spots in your practice or identify opportunities that can be utilized to your advantage. Although a general CPA may be well equipped to help with financial consulting and a dental consulting firm may be well equipped to assist with practice management, a dental CPA can provide both financial and practice management services.

You can rely on our dental accounting firm for assistance. Get in touch with us today to schedule a consultation.

ADCPA
Url: https://adcpa.org/

Advantages of Outsourcing Your Dental Accounting | Best Dental CPA

You have covered all the bases when it comes to providing dental services efficiently and confidently. In contrast, when it comes to your practice’s bookkeeping and accounting, you may not be as confident and always aware that your time would be better spent in other areas. It is likely that you did not choose to become a dentist in order to worry about accounting and paperwork.

Maybe you’ve questioned the accuracy of your bookkeeping, or you want to improve efficiency (especially your own). It might be time to consider outsourcing your bookkeeping and accounting if one or both of those scenarios apply.

These functions can have a significant impact on your practice’s productivity and profitability.

  • Rather than spending time on bookkeeping, you can spend it on improving the overall experience of your practice and patients.
  • An expert will handle your books, so you can be sure they are accurate and make well-informed decisions about your practice. As a result of better bookkeeping, tax time often brings fewer surprises.
  • Having accurate accounting records will give you peace of mind. You will be able to keep a better handle on cash flow and know where you stand at all times by letting the experts handle it for you. Therefore, you are prepared for any emergency that may arise (for instance, a global pandemic).
  • Having a financially healthy practice facilitates a strong personal financial plan for you, including aggressive retirement savings.

Do you already outsource roles like IT and/or HR? When it comes to such a vital business function as your finances, outsourcing to experts who specialize in dental practice finance makes good business sense. As our world becomes more virtual every day, it makes sense to consider a virtual bookkeeping and/or CFO solution sooner rather than later.

Accountants who specialize in dental practices offer expert accounting services. Using their accounting and bookkeeping services can result in improved cash flow management, accurate record-keeping, and meaningful data reporting for better, more streamlined financial management.

A dental accountant can help you by providing:

  • Savings: You won’t have to pay for employee benefits, payroll taxes, hiring, and training.
  • A wide breadth of experience: You get access to experienced CPAs with a breadth of knowledge of the industry, as well as certified bookkeepers who you can rely on.
  • Experience: You have the support of someone who can assist you whenever you have questions.
  • Flexibility:  When you require assistance with some or all of your bookkeeping requirements.

Dental accountants are dedicated to helping you with your financial tasks so that you can focus on what is most important to you. Their services include account reconciliations, bill payments, payroll journal entries, financial reports, time-saving tools, and remote working options.

If you feel overwhelmed by any of these tasks or simply are tired of doing your own bookkeeping, you should probably outsource it.

Our dental accounting firm successfully assists dentists with their bookkeeping needs. If you would like an expert from our team to help you and your practice succeed, contact us today!

ADCPA
Url: https://adcpa.org/

Do Dentists Need a Dedicated CPA? | Best Dental Accountant

There are a number of reasons why dentists need a dental CPA. You can grow your revenue and cut costs with the help of financial housekeeping.

In addition to keeping track of your books and maintaining your accounts, dental accountants are also responsible for ensuring that you take advantage of all government schemes and programs that support small businesses. Additionally, they ensure that you are always in compliance with the policies. Dental CPAs are also responsible for tax preparation and optimization.

Many experienced CPAs offer virtual CFO services to help dentists scale their practices through budgeting, forecasting, planning, and strategic implementation of financial decisions. The guidance and mentorship of a virtual CFO is invaluable for ambitious dentists who are interested in expanding and scaling their practices.

Dental Accountants: What You Should Consider

It is common for small business owners and dentists to overlook some crucial elements when choosing a professional dental accountant, which can end up costing them a lot in the long run. When hiring a dental CPA for your practice, consider these factors.

1. Provided Services

CPAs can either be generalists or specialize in serving a specific segment of the industry. Ask your CPA about their range of services and how any additional services that they recommend will impact your revenue at your next meeting. If your CPA only offers a few services, it may be time to switch. 

2. Dental accounting knowledge and experience

When searching for a dental CPA, you should consider the level of experience and expertise they bring to the table.

An experienced dental accountant will optimize your tax position, claim necessary deductions, and take advantage of specific government programs. In addition to ensuring accounting compliance, dental accountants can often be a jack of all trades and help your business grow.

3. Transparency and communication 

Many dental accountants don’t disclose their activities and strategies transparently due to the complexity of the field. It may not be a good fit for your business to hire an accountant who isn’t openly communicating, guiding, and mentoring you. Transparency and the quality of communication are therefore crucial factors to consider.

4. Providing value for money 

Revenues and costs are two essential components of a business. Hiring a dental CPA should provide you with more value than the cost itself in order for it to be a worthwhile investment.

Choosing the best option doesn’t mean choosing the cheapest. Consider the cost and benefits of your investment before making your decision.

5. Fees that are clear and transparent 

Dental bookkeeping and accounting costs need to be transparent and clear in order for you to plan your dental expenses effectively. Wouldn’t it be nice to avoid unpleasant surprises down the line? The dental accountant you hire should offer transparent pricing and be open to discussing all the costs involved in hiring them before you sign on.

6. Having the ability to answer complex questions 

You rely on your dental accountant for a variety of things related to money and finances. Would you want to work with someone who can not answer complex questions? It is unlikely that you would. A dental CPA with a background in accounting should be able to answer any money-related question you may have openly and transparently.

The best people to work with are those who are always able to provide you with the correct answers whenever you have a question. It is only possible for them to accomplish this if they have a clear understanding of what they must do and what dental practices require from their accountants.

So there you have it! We hope that you now understand why dentists require specialized dental accountants. Our accounting firm specializes in assisting dentists. To schedule a consultation with one of our experts, please contact us today.

ADCPA
Url: https://adcpa.org/

Identifying Overspending in Your Practice | Best Dental CPA

You are responsible for many non-clinical tasks as a dental practice owner, including human resources, tax filing, contracts, and insurance. When ignored, these things can inhibit growth and even cause significant problems in a business.

The practice of keeping accurate accounting records is known as bookkeeping. A company’s sustainability depends on its records. In addition to managing cash flow and meeting financial obligations, accurate bookkeeping helps businesses plan their investments.

In the eyes of some business owners, it is a tedious task that must be completed before their CPA can file their taxes. Keeping clean books can help you do more than just file your tax return on time. You can use it to spot fraud, map business growth and identify areas of overspending.

Types of financial ledgers

A financial ledger shows your company’s profit and loss. A comparison is made between the revenue coming in and the expenses going out.

Profit and loss statements and balance sheets are the most important ones to review.

Balance Sheet

Essentially, a balance sheet is a statement of a company’s assets, liabilities, and owner’s equity at a particular point in time. The balance sheet is typically prepared at the end of a set period (e.g., quarterly or annually). There are two columns on a balance sheet. On the left, you can see the company’s assets. Liabilities and owner’s equity are listed to the right.

A balance sheet provides important information to a business owner about the health of the company. The owner, however, isn’t the only person who looks at the balance sheet. If you plan to sell your practice, lenders, investors, partners, or buyers will review it when you apply for financing.

Profit and loss statement

In finance, a profit and loss statement (P&L) shows a company’s revenues and expenses during a particular period. This statement explains how revenues are transformed into net income.

In addition to recording the practice’s collections, the P&L separates your statement into two sections:

  • Direct expenses: costs that vary according to production. As you see more patients, these costs will increase—like lab fees, supplies, hygiene, and chairside salaries.
  • Fixed expenses are costs that are specific to your company and remain constant regardless of the quantity of goods or services produced.The cost of your building rent, insurance, pension, or subscriptions, for example, is the same month to month, regardless of your production level.

By tracking both direct and fixed expenses, the business can identify overspending or areas for growth.

It is important to be organized.

No matter who manages this report, whether you do it yourself or hire a bookkeeper, a poorly organized P & L will not be helpful. Expenses should not be listed in separate categories on five pages. As with tracking your personal expenses, categorizing your expenses allows you to focus on the big picture. You will not use it if it is not usable.

An organized P & L allows you to sit down every year and review where your business is this year to date, last year, and even the year before. As a result, you can spot outliers and trends.

A monthly review is also very important. There may be things that come through that you will not remember at the end of the year. For example, if your insurance fees were extremely high last month, you will remember that you had paid your annual insurance premiums. Given everything you have going on, it is unlikely that you will remember each detail like this at the end of the year.

A CPA can not proactively plan your tax projections if your books are not up-to-date. Furthermore, if you only prepare them for a six- or nine-month period, they will be unable to strategize for you.

Outsourcing

It is important to leave financial statement management to a professional to ensure that all the categories are reported consistently, as well as to ensure that bank and payroll reconciliations are done on a monthly basis, which allows the owner to ensure that they are always tied to cash. It is also possible to detect fraud by staying organized.

In addition to other benefits, having good, clean books will make filing your tax return easier for your tax preparer. It can save you both time and money on your tax bill. As a result, it is cheaper, but it also prevents errors from occurring. You pay more in taxes when stuff gets missed.

It’s not only time-saving to have a professional accountant handle your monthly bookkeeping; it’s also strategic.

Rather than categorizing expenses, owners can now use the output strategically to enhance their businesses. It could be that accounts receivable have been running too high and have gone unnoticed, or lab supplies have gradually risen over the past six months. Early insight into changes can increase profitability in the short and long term.

ADCPA
Url: https://adcpa.org/

3 Ways Dental Office Owners Can Save on Their Taxes | Dental Accountant Near Me

The dental industry is highly competitive, and margins can be tight. So, it’s important to save money wherever you can—and that includes your taxes.

Here are three ways dental office owners can save on their taxes shared by our dental cpas:

1. Take advantage of small business tax deductions.

As a small business owner, it’s important to take advantage of all the tax deductions and credits that are available to you. This can help reduce your tax liability and leave you with more money to reinvest in your business.

There are several small business tax deductions available, and the best way to take advantage of them is to work with a tax professional. They can help you identify the deductions you qualify for and file the necessary paperwork.

While taking advantage of small business tax deductions can save you money, it’s important to remember that they can also add complexity to your tax return. So be sure to work with a tax professional who can help you navigate the process and maximize your savings.

2. Invest in energy-efficient dental equipment.

If you’re looking to invest in new dental equipment, you may want to consider energy-efficient options. Energy-efficient dental equipment can help you save money on your energy costs, and it can also help you reduce your carbon footprint.

There are a variety of energy-efficient dental equipment options available on the market today. From energy-efficient dental chairs to LED dental curing lights, there are plenty of options to choose from. You can even find energy-efficient dental handpieces that can help you save even more money.

If you’re looking to invest in new dental equipment, energy-efficient options are definitely worth considering. Not only can they help you save money, but they can also help you reduce your impact on the environment.

3. Hire an accountant who specializes in dental office taxes.

As a dental office, you have unique tax needs that require the expertise of an accountant who specializes in dental taxes. Dental offices are subject to many of the same taxes as other businesses, but some unique taxes apply specifically to dental offices. For example, dental offices are required to pay a special tax on the sale of dental supplies.

Accountants who specialize in dental office taxes will be familiar with all the tax laws that apply to your business. This will help ensure that you are complying with all the tax laws and that you are taking advantage of all the tax breaks and deductions that are available to you.

In conclusion, dental office owners can save on their taxes in a variety of ways. The most effective way is to contact a dental accountant and schedule a consultation. Other methods include taking advantage of tax breaks and hiring a tax accountant. By taking these steps, you can save money on your taxes and improve your bottom line. Please contact our dental accounting office today to learn how we can help.

ADCPA
Url: https://adcpa.org/

3 Dental Bookkeeping Mistakes You’re Probably Making (And How to Fix Them) | Academy of Dental CPAs

Owning a dental practice is a demanding position. In addition to seeing patients and managing your staff, you also have to keep track of your finances. While bookkeeping may not be your favorite task, it’s important to make sure that you’re doing it correctly. Otherwise, you could end up making mistakes that cost you money.

In this blog post, we’ll discuss three common dental bookkeeping mistakes and how to fix them.

Dental Bookkeeping Mistake #1: Not Tracking Your Income

One of the most important aspects of dental bookkeeping is tracking your income. Without accurate records of what you’ve earned, it’s impossible to make informed financial decisions for your practice. Yet, many dental practices fail to track their income properly, leading to all sorts of problems down the road.

If you’re not tracking your income, you could be making some serious mistakes that could have a negative impact on your practice. Here are just a few of the things that can go wrong if you’re not keeping accurate records of your dental practice’s income.

  • You could miss out on tax deductions: Without accurate records of your income, you could miss out on important tax deductions that could save you money.
  • You could make poor financial decisions. Without knowing how much money you’re bringing in, it’s difficult to make sound financial decisions for your practice.

Dental Bookkeeping Mistake #2: Failure to Track Expenses

One of the most important aspects of running a successful dental practice is keeping track of your expenses. This can be a difficult task, as there are many different items that you need to keep track of. However, it is essential to track your expenses in order to maintain a healthy financial situation for your practice.

One of the biggest mistakes that dental practices make is not tracking their expenses. This can lead to major financial problems down the road. Tracking expenses can be done in a variety of ways, but consistency is the key to success. 

You can use a simple spreadsheet to track your expenses, or you can use more sophisticated financial software. Whichever method you choose, make sure that you track all of your expenses on a regular basis. If you are not tracking your expenses, you are putting your dental practice at risk. 

3rd Dental Bookkeeping Mistake: Failing to Keep Up with Accounts Receivable

One of the most important aspects of dental bookkeeping is staying on top of your accounts receivable. This refers to the money that is owed to you by your patients. When patients don’t pay their bills on time, it can put a strain on your cash flow and make it difficult to keep up with your own bills.

One way to stay on top of your accounts receivable is to use a software system that can track payments and send reminders to patients who are behind on their payments. There are a number of different software systems available, so be sure to do your research to find one that will work well for your dental practice.

Another way to stay on top of your accounts receivable is to hire a bookkeeper or accountant to handle this aspect of your business. This can be a good option if you don’t have the time or resources.

If you’re reading this, chances are you’re making at least one of these three dental bookkeeping mistakes. But don’t worry, we can help! Our dental accounting office offers a wide range of services to help you get your bookkeeping in order. We’ll work with you to find a solution that fits your needs. So, please contact our dental accounting firm to schedule a consultation. Our dental accountants look forward to hearing from you!

ADCPA
Url: https://adcpa.org/

Using Feedback to Improve Workplace Performance | ADCPA

We exchange feedback almost continuously from the leadership team as well as from the team members. Leading is as much about listening as it is about speaking. Although feedback is one of the most important aspects of performance improvement, it can also be one of the most challenging aspects of the process. People generally do not like to look at themselves critically. Throughout the following sections, we will illustrate some of the most effective methods for not only receiving constructive feedback but also handling it in such a way as to ensure its maximum effectiveness.

Ask for what you need:

People tend to assume that when something goes wrong, they will be informed and corrected as soon as possible. In an ideal world, this would be wonderful, but unfortunately, it isn’t the case when we look at what is happening in reality. By asking for feedback directly, you give your employees and your leaders the chance to provide you with valuable insights into what they think of your practice. You may miss out on mistakes that have been made or innovations that have improved processes or operations if you don’t ask.

Even if your feedback is not received formally, it can help strengthen your systems and enhance your performance. Do not hesitate to request feedback whenever possible.

Rather than reacting, listen and digest.

We can find it difficult not to feel personally attacked when we receive feedback, especially when it is critical. In situations like this, the worst thing you can do is react without considering the perspective of the other party. Listen to what they have to say and consider the reasons behind their feelings.

To understand the other person’s perspective, keep a clear head and ask clarifying questions. Positive and helpful feedback may be misinterpreted and turned into a destructive situation. Consider asking for additional time to digest your feedback if necessary. There is no harm in returning to discuss your feedback in greater detail and from a different perspective. If you allow yourself the necessary space and time, you will be in a position to deal with feedback more constructively and gain a better understanding of your leadership style and practice.

Providing Feedback Through Reflection:

Having a conversation with your team members is not the only way to receive valuable feedback. The successes and failures you have experienced can also provide you with valuable insight into your strengths and weaknesses. Are you prone to experiencing the same failure repeatedly? It may be necessary to determine the root cause of the problem and formulate a plan to prevent it from occurring again in the future.

The ability to hear criticism, whether constructive or not, can be difficult. It is, however, true that, at the end of the day, that brief period of difficulty will pay off for you and your practice in the long run. Our accounting team might be able to provide you with non-biased, constructive feedback from an outside perspective that may help you to grow your practice. Having the ability to analyze your strengths and areas for improvement is a great way to help you grow your practice. Contact our dental accounting office today to schedule a consultation.

What Makes a Real Dental CPA Better than Accounting Software | Best Dental CPA

In the years to come, as humanity expands further into the digital age, the number of accounting software providers who promise to offer everything your business requires will certainly grow. The truth is that, despite what these claims may suggest, a real dental accountant is still superior to software for your practice. 

The majority of people believe that accountants are experts in basic math, but that isn’t the case. To save ourselves the time of having to analyze and interpret the results, we let the computers do the majority of the math for us.

Although computers are capable of balancing your numbers, they cannot determine whether those numbers are accurate or what their implications are for the financial future of your organization. By contrast, a dental accountant can analyze the financial health of your practice by comparing your numbers to those of successful practices, tracking your progress over time, and determining the appropriate overhead costs for your practice.

A dental CPA is also available to assist you with determining what goals you wish to accomplish and what decisions you need to make to accomplish them. One of the weaknesses of software programs, not recognized by many, is that they can only tell you when something is wrong. Most of the time, they are unable to determine what the problem is and they are unable to provide a solution that is unique to your situation.

Because dental accounting professionals have vast experience in everything related to dentistry, they know what financial strategies will work and which will not. Their services do not end with just doing the math; we also provide support during financial emergencies as well as when you simply wish to learn how you can manage your money more effectively. 

While there is no denying the fact that these software tools can be very useful when they are used correctly, their value is often only as great as the person who uses them. Individuals who are inexperienced when it comes to managing their finances on their own may make costly mistakes they could have avoided with the support of a professional.

A dental accountant will be able to assist you at whatever stage you are at in your dental career. Your business and your career will thrive with our team of dental CPAs. The services we provide range from tax preparation and minimization to business management, start-up services, retirement planning, and yes, even bookkeeping. To arrange a consultation with one of our dental accounting professionals, please contact us today.

Accounting Problems – How A Creative Mind Can Solve Them | ADCPA Dental Accountant

Al Capone, a notorious crime boss and mobster, committed countless crimes either directly or through his organization. Ultimately, it was not his gangster reputation that led to his arrest and sentencing. Instead, Capone was charged with income tax evasion. It took a team of accountants to bring down a man who had been the crime boss of Chicago for seven years.

The story has little to do with dentistry, but it is an example of how important accountants are to every industry. When you hire a dental accountant, you can be confident that they are professionals who have dedicated their lives to dentistry. Dental accountants are more than just tax preparers; they are specially trained to understand dental businesses and offer solutions that others may not consider. The following are a few ways that dental accountants can assist in the success of your practice.

Understanding Dentistry:

The services of an accountant of any type will be beneficial to your practice, but a dental CPA understands the ins and outs of dentistry and can utilize this knowledge to your advantage. Dental accountants are uniquely qualified to assist you since they comprehend the broader context of dentistry and can approach a problem from multiple perspectives. Since they fully understand your business, they can recommend a solution that will be ideal for you and which you can feel confident about.

Looking At The Big Picture:

Traditionally, accountants have been analytical thinkers. To solve a financial issue in your practice, you may need a new perspective that takes into account all the consequences. Dental accountants are capable of thinking laterally, which is one of the main reasons why they can greatly contribute to your practice’s success.

Creative Thinking:

Difficult problems require creative solutions. Even though accountants aren’t known for their creativity, you may be surprised to learn that their line of work actually requires quite a bit more creativity than might be expected. A dental accountant combines their dental knowledge and experience with a unique approach in order to create innovative solutions that help your practice meet and exceed its financial goals. 

Having the right accountant can make the difference between success and failure in your practice. Although it is best to consult an accountant before problems arise, we are always available to help you. For assistance with your financial goals and a highly specialized approach, please contact out dental accountant of professional dental CPAs.