As your practice grows, dental bookkeeping becomes increasingly difficult. But it’s at these stages of growth that accurate and efficient bookkeeping is most important.
You need to make sure that you’re not underpaying or overpaying taxes, that you’re closing books properly, and that you have the precise financial insights needed to enable further growth.
Denk & Associates helps businesses throughout Harrisburg, PA, including dental offices, keep track of their bookkeeping to reach their tax and financial goals.
The following five tips from us can help you manage your bookkeeping much more effectively.
It’s essential that you follow bookkeeping best practices within your practice. One of the most effective ways of doing this is ensuring that you’re accounting for all expenses. This makes it easy to see what’s deductible when it comes time to file taxes, so you don’t needlessly overpay.
You also need to reconcile your accounts at least every week. As your practice grows, this will become something you need to do much more often.
When doing your own dental bookkeeping, you should be aware that you need to close your books each month. Doing so makes it easier to prepare quarterly and yearly financial statements, as well as reconcile different accounts.
And you need to keep in mind that it’s inadvisable to make changes to accounts once you’ve closed them. Any alterations can lead to errors that increase the chances of misfiling taxes and ending up with inaccurate financial records.
Bookkeeping tools such as QuickBooks and Xero tend to make dental bookkeeping easier. But you should remember that simply installing them isn’t necessarily going to make a difference.
In addition to understanding accounting principles, you need to ensure that the tools you choose are set up to meet your practice’s specific needs. Of course, these change as your practice expands and you need to account for hiring, payroll, new equipment, and numerous other things that come with growth.
If you do decide to incorporate this piece of advice into your dental bookkeeping, training will certainly be necessary.
A common mistake dental offices make is using a standard COA to track how much they spend and receive. An industry-standard one with features specific to dental bookkeeping will give you greater utility. And it will also limit the chances of making errors and omitting essential information.
This is doubly important since you might need to use your chart when preparing financial statements.
Also, you’ll eventually notice that using an incorrect chart has crippled your practice’s potential when you attempt to streamline and grow your dental office. Records with errors and missing information put you at a disadvantage when you’re trying to evaluate your financial state and avail resources for expansion.
While the four tips above will help you make significant progress in staying on top of your bookkeeping, there’s no question that maintaining your own records puts a strain on your time and resources.
Especially as your practice grows, you’ll find it difficult to meet new obligations while handling your bookkeeping efficiently.
Outsourcing is a cost-effective solution, particularly considering that you’ll have all your accounting needs taken care of by experienced professionals. Besides leaving you free to invest more time and effort into the core of your practice, this approach heavily minimizes any risk of errors.
Denk & Associates is a leading CPA firm in Harrisburg, PA. Dental offices like yours are among the businesses we provide with a wide range of tax and accounting services. Contact us today to always maintain comprehensive, up-to-date, and accurate financial.
