Bookkeeping is a method of combining people into various industries. Its mission is to allow companies to better know their financial status by tracking and recording the incoming payments. Bookkeeping for dental offices, while exciting, is an indispensable part of running a dental company.
Why Bookkeeping Is Important in Various Industries
There are a lot of spheres in the businesses that are complicated machines with many moving parts. This can make it hard to track revenue and costs on a particular project, let alone many.
Here are some tips to enhance agency’s bookkeeping efficient:
Tip 1: Record Details About Payments and Invoices
You presumably already know that you should be putting all of your company’s receipts. Apart from giving you insight data into where your money is going, receipts also show your business rates if you ever get audited.
Note down all the data from your receipts and invoices in case you ever want it. You can do this simply manually or by using bookkeeping software. You should also keep all your bookkeeping journals refreshed regularly to know how your company is doing and provide a possible audit.
Tip 2: Use Job Costing to Control Project Costs and Overall Business Ledgers
Job costing is a method that assists you in managing the costs of working on a project. It enables you to estimate labor, material, and overhead cost and learn how much you should sell for the project.
Standard job costing can be very time-intensive, particularly when it comes to multiple projects. However, you can explain the entire process with the aid of software.
Whether you choose to do a job running manually or using software, the same steps may be applied. First, break down the project into stages, and then enter all the tasks needed to make each step.
It would help if you also dedicate your income and expenses from each design into a general ledger to get an objective overview of your gross and net income.
Tip 3: Use Various Bank Accounts
Keeping all your company’s money in a single bank account makes it more challenging to know how you are doing financially because all the money in the bank account might not certainly be yours. Some of it is likely for things like payroll, covering costs, and paying taxes.
This is where having many bank accounts can help. You could have one account for paying expenses, another for managing payroll, and a third to take payment for clients.
This assists you in getting a more accurate idea of how much money is coming in and going out of your company every month. It also makes it more comfortable to stay on top of bookkeeping.
Choose the Right Bookkeeping Firm
There are lots of bookkeeping answers out there you can use to automate and streamline your company’s bookkeeping. However, if you need a professional and responsible agency to provide you with bookkeeping services, make sure to call the professional Ottawa accountants at Envolta. Building connections with the customers is their number one advantage; you are not just a number. If you are not 100% happy with their service, they will provide you your money back.
Do not Combine Your Personal and Business Finances
Combining business and personal transactions might not seem like a big deal until you have to sort through them. The bookkeeping procedure becomes even more complicated when the two types of transactions are combined.
Trying to figure out which purchases, or deposits belong to the firm takes time and is difficult. Consequently, it can be hard to understand the company’s financial situation. And that makes things much more complicated when it comes to your taxes.
Taxes and financial statements are not the only areas that could be affected. It could also affect your capacity to locate investors or secure finance. When evaluating whether to provide your company credit, prospective lenders want to see clear and accurate financial information.
Two different accounts are the ideal answer. One is just for commercial transactions, and the other is for personal ones.
Use a chart of accounts in the dental sector
Trying to track revenue and expenditure using a conventional chart of accounts is a common mistake made in dental bookkeeping. A regular COA does not benefit your practice to the same extent that a COA from the dentistry sector would.
Without using a chart of accounts designed specifically for dentistry, you run a risk of omitting crucial information. Moving those data to other financial reports in the future might have an impact on you.
Your chart of accounts can be set up to monitor the categories that apply to your business model. An illustration of an overhead expenditure might be your receptionist’s salary. Payroll for the dentists and hygienists, however, would be included in the cost of sales.
These are significant differences that could be missed if you use a regular COA instead of a dentistry industry COA.
Use A Cloud-Based Accounting Software
Digitalizing your bookkeeping is among the finest things you can do for your dental company. It reduces the mess that paper causes and makes it simpler to keep accurate financial records.
It might be challenging to stay on top of all the tax regulations you will need to follow while handling bookkeeping for your small business, which is why many business owners opt to work with a dental CPA or accounting firm. However, for a small dental clinic, outsourcing might be expensive.
Accounting software for small businesses provides a more economical option. You do not need to be an expert in bookkeeping because the majority of accounting software comes preloaded with a chart of accounts and tax regulations.
To begin, you will still need a fundamental understanding of bookkeeping or accounting, although the majority of accounting software provides simple instructional walkthroughs of what to accomplish.
Accounting software that is hosted in the cloud is excellent for dental bookkeeping. Their cost-effective Sunrise Plus edition allows you to:
- Keep receipts and expenses organized
- Easily generate profit and loss statements
- View up-to-date cash flow monitoring
- Send and track invoices
Review Your Finances Regularly
Reviewing your finances is an important part of ensuring your bookkeeping process is working well. Additionally, it helps in decision-making that is ideal for your company. If you do not frequently review your financial condition, you can have unresolved questions regarding your company.
For instance, accepting the acquisition of new equipment might put your finances in danger if you are unaware of your rising spending. Spend some time every week or month going through your company’s finances. The following are some advantages of doing this:
- makes you informed of the financial position of the organization
- provides reliable information on which to base judgments.
- enables you to focus on needless costs
- aids in discovering any financial deficits
- determines the source of the earnings
Close Your Books the Right Way
You must close your books after a financial period. indicating that the reports’ financial data is complete.
That is it once the books are closed. Nothing else can be altered. This is done to prevent data from previous accounting periods from entering the present period.
If your books are not closed properly, it might lead to errors and erroneous estimates of how much profit or loss was made within a given accounting quarter. You must move journal entries to a general ledger account to correctly close your books.
The majority of small firms opt to shut their books once a month. You might also decide to close your books once a year if that is what works best for your company.
Reconcile Your Financial Details
It is simple for all of the numbers to start blending when entering data into a dental accounting system. Before you realize it, there are misplaced figures or incorrectly reported charges. The financial facts must be reconciled as you proceed, for this reason.
Confirming the dental accounting entry amount using a copy of the receipt, invoice, point-of-sale ticket, or other relevant information that may validate the amount that should be entered is an easy method to achieve this.
- Company bank account statements
- Medical billing for insurance
- Cash flow statements
- Accounts receivable documents
- Accounts payable documents
The information in these documents may also be used to provide monthly financial reports for your business.
Consider Outsourcing Your Bookkeeping
Dental accountants are chosen by dentists and oral surgeons to handle their bookkeeping on their behalf for a variety of factors. It is possible that you are managing a larger dental business or that the workload is too great to delegate to an office manager.
Finding dental bookkeeping services that take the task off you, in either case, may be just what you need to devote more time to your patients. By contracting out your bookkeeping, you free up time for what you do best—improving people’s smiles.
The accountant is taking care of your finances while doing what they do best. Although hiring accounting services is expensive, there are several advantages as well:
- Increased accuracy
- More time to dedicate to patient care
- Some accounting services may help you run payroll
- Trained professionals who are well-versed in bookkeeping
- May assist in developing tax strategies or tax preparation
Overall, dental bookkeeping demands meticulousness and a fundamental understanding of bookkeeping principles. You will need to employ a chart of accounts suited to your industry, reconcile financial information, and ensure that the books are closed properly each month. The entire process requires time.
You will still need to frequently analyze the financial reports and refrain from combining personal and commercial operations even if you choose to outsource your accounting. This will prevent errors in the accounting process and help you remain on top of the business’s financial situation.
The information provided in this post does not, and is not intended to, constitute business, legal, tax, or accounting advice and is provided for general informational purposes only. Readers should contact their attorney, business advisor, or tax advisor to obtain advice on any particular matter.