This translates to about 61 dentists for every 100,000 people. ADA statistics also show that, on average, dental practice expenses are rising faster than practice revenue.
With financial pressures like this in today’s highly competitive marketplace, comprehensive and accurate financial reporting systems are essential for your practice’s long-term success and stability.
The ADA estimates that more than a third of today’s dentists are solo practices, and 40% of dental practices operate with a few dentists in one shared office. Small practices often lack comprehensive in-house accounting expertise, and many turn to external specialists for help with their unique operational and financial reporting challenges.
That’s where Padgett Advisors comes into play. We specialize in bookkeeping and accounting for dentists, including general practitioners, pediatric dentists, oral and maxillofacial surgeons, orthodontists, periodontists, and other specialty practices.
More than one-third of dentists report feeling too busy or overworked, according to the ADA. We can help manage the financial side of your practice, allowing you to focus on the clinical aspects of dentistry.
The specialists at Padgett have years of experience providing high-quality accounting services for dentists including:
Tracking revenue, collections, payroll, operating expenses, equipment purchases, and other financial transactions can be time-consuming for your office staff. Our dental bookkeeping specialists can handle these administrative chores directly for you on a weekly or monthly basis — or temporarily if your existing office manager unexpectedly leaves the practice.
The use of a trusted specialist in accounting for dentists gives you the peace of mind of knowing that transactions will be recorded in the appropriate accounts with detailed, accurate descriptions. This can alleviate headaches when it’s time to prepare your year-end financial statements and income tax returns.
Preparation of monthly and year-end financial statements
Comprehensive financial statements include three reports 1) the income statement, 2) the balance sheet, and 3) the statement of cash flows. These provide an overview of your dental practice’s financial health.
We offer prepared financial statements that comply with U.S. Generally Accepted Accounting Principles. Alternatively, some small practices may prefer to issue cash-basis or tax-basis financial statements. We can help you determine what’s appropriate for your current situation.
Interim operating reports
Just like brushing your teeth daily isn’t enough to maintain good dental hygiene, year-end financial reporting isn’t enough for most practices. Effective dental accounting requires ongoing diligence. We can help you optimize patient and insurance billing, providing support as you deal with the complexity that insurance brings to your practice’s cash flow. We also can identify key metrics to help practice owners monitor financial performance on a real-time basis using weekly or monthly flash reports.
High-tech equipment — such as dental probes, intraoral cameras, curing lights and digital X-rays — is another costly expenditure for dentists. Dental equipment is becoming more advanced, faster and more efficient. Acquiring new equipment or technology can help your practice expand the treatments you offer and increase patient volume. We can help evaluate these investments, including which tax breaks may be available and whether it’s smarter to buy or lease equipment, in light of today’s rapidly advancing technology. If your practice includes more than one dentist, our team can also help allocate these and other overhead costs among your practice’s owners.
Analyzing financial performance on a regular basis can help you maximize profits and identify practice inefficiencies. Interim reporting can also help you identify the need for a line of credit to temporarily cover operating expenses while you’re waiting to receive payments from patients and third-party payors.
Budgets and forecasting
Historical financial results may be used to project how your practice will perform in the future. We can prepare budgets and forecasts to help determine whether you have the office space, equipment, and staffing to meet future demand, as well as identify competitive threats and growth opportunities in your local market. These reports can also be useful when applying for bank loans or merging with another practice.
Throughout the year, we can compare your actual results to your budget. This analysis can ensure your monthly billings and expenditures stay on track. Major deviations may require revisions to your original budget or corrective actions. It’s always better to find out this information early, rather than to wait until year end!
The purpose of accounting for dentists should extend beyond compliance with lending and tax requirements. Most dental practices want to know how they measure up against competitors.
We can provide industry benchmarking data, based on your location, size, and specialties, such as those provided by the ADA, the Academy of General Dentistry (AGD), and local or dental specialty trade associations. These benchmarks can be compared to your financial results to determine operational strengths and areas for improvement. They can also help evaluate your cost structure and the competitiveness of your compensation packages.
Accounting software selection
Effective bookkeeping and accounting for dentists requires more than Excel spreadsheets.
Your practice needs specialized accounting software to track such items as:
Dental practice accounting systems also must be secure to protect sensitive patient personal and billing information. Hacked or stolen patient records can lead to financial losses and harm to your practice’s reputation.
There are several bookkeeping and accounting solutions for dental practices that vary in capabilities and cost. We can help you select a program that’s appropriate based on your size and specialty.
If you already have accounting software in place, it may be time to review it. For example, software that you selected when your practice opened may no longer be appropriate or a new product may have become available that’s a better fit for your current needs. We can help you assess your current software and evaluate alternatives to ensure you’re utilizing accounting software to its full potential.
Dental practices are as unique as their patients. Accurate accounting for dentists requires the use of a specialist who understands the operational challenges you face and the opportunities that lie ahead.
At Padgett, our team of accountants for dentists helps small dental practices thrive in today’s competitive marketplace. With many decades of experience, we are proud to provide cost-effective, reliable bookkeeping and accounting for dentists nationwide.
Even with the best tools and systems, dental accounting can be a complex task, especially for dentists without a financial background. You don’t have to figure out the details on your own. Contact us today to learn more about how we can help with your dental practice accounting needs.