Posted Sunday, November 8, 2020
One of WCG’s specialties is bookkeeping for dental practices. Is dental bookkeeping special or unique? Not really. But! This is similar to a house… where everyone who owns a house has four walls and a roof, yet the carpeting, tile and colors are different. Specifically for dentists, we want to expand the debits and credits into quality dental consultation-
- Should you finance or lease that new equipment?
- How do you review you day sheets?
- Is insurance realization within limits?
- How do you compare to other dental practices from a peer-to-peer perspective?
- Where should my overhead be?
- How do I track procedures not on claim?
- How to manage patient aging reports so I can focus on whats important?
To answer those questions we need solid bookkeeping to springboard into the “what does it all mean?” area of review and consultation.
Dental bookkeeping is an important task to a practice – bookkeeping provides a business owner, the dentist, a general ledger, profit and loss statement and balance sheet which are combined to called financial statements. They are more than fancy graphs and charts showing cash in and out of your accounts – financial statements provide valuable information to you about where your money is going. Can you afford to purchase new equipment? Check the financial statements. Where are you spending the most money, and what expenses can you cut back on? Check the financial statements. Are you on budget for the month? Quarter? Year? (We know, we know…check the financial statements!) As we said, small business bookkeeping is definitely important to your success!
Generally speaking, some business owners have a fairly good pulse on where their money is going. On the other hand, business owners and specifically dentists are focused on providing quality services to their patients and the formal financial aspects of the practice are secondary. However, this is dangerous. So, the answer is divide and conquer. You, the dentist, provide excellent medical treatment. We, the dentist CPA, provide financial statements and supporting analysis. Divide and conquer.
Bookkeepers Versus Accountants
Let’s look at the differences between bookkeepers and accountants. These terms are frequently used interchangeably and while they share some things in common, there are differences that might matter when a business owner is looking to hire someone to maintain their books and financial records.
Bookkeepers are tasked with keeping accurate financial records. Sounds simple, right? Not necessarily. A high attention to detail is needed to ensure numbers are entered correctly, and the coding is just as accurate.
Accounting is more specialized, and picks up where bookkeeping leaves off. Accountants interpret, classify, analyze and summarize the financial data. They typically have more advisory positions and offer advice to business owners. Can an accountant do bookkeeping? Absolutely – but they also can provide a higher level of guidance to dentists as well. Your friends at WCG are accountants; we are not bookkeepers. While we can enter and code transactions as bookkeepers, we provide the most value as accountants (think Warren Buffet) by telling you what your financial statements mean rather than creating them.
Looked at another way; we are dental accountants who happen to do dental bookkeeping.
So back to our original question – do you need a bookkeeper? The answer is… it depends! Great, you’re thinking. What does it depend on?
Here is a quickie checklist of questions you may want to ask yourself when trying to decide if you need (or maybe just want) a bookkeeper for your dental practice, or if you should do it yourself:
Do you have the time to do it yourself?
Dental bookkeeping boils down to keeping accurate records. Records take time. Depending on the size of your practice and the number of transactions, you might decide that it’s worth it to have someone else input the numbers so you can spend your time building your practice and creating efficiencies. Do you really miss hearing the beep of QuickBooks after each entry? If so, please consider that every beep you create is taking away from valuable billable time.
Also, dentistry like other medical professions doesn’t allow for a remote work or work from home. In other words, Monday through Thursday and some Fridays, you need to maximize your utility. Sure, you could use the weekend to maintain your financial records… but you should spend that offline time to build your practice and relax.
Is it a chore you want to take on?
As Jason often says, he can mow his own lawn and change his own oil, but he’d rather pay someone else to do it. Bookkeeping is a chore – some might actually enjoy it, but others might view it as something they’d rather hand off. However, if dental accounting is viewed as a chore by dentists, it happens to be WCG’s chosen profession.
Do I know how to do it myself?
In the world of QuickBooks Online (QBO) and other products that make financial data entry much easier, this may not be a deciding factor for you. On the other hand, most dentists take comfort in knowing they have hired someone who does dental bookkeeping every day to handle their information. Accounting and perhaps bookkeeping is a profession, not a hobby. QuickBooks, Xero, Waveapps, etc. all make you feel like you are a bookkeeper but didn’t you go to a zillion years of school to be a dental bookkeeper… you put all that hard work in to be a dentist.
Are you afraid of not getting the most business tax deductions?
Often we obtain financial records and data from clients who are one hot mess. Great people, just lousy recordkeepers. And our first thought is… our primary concern is… is this dentist minimizing taxable income, or are the records such a mess that they are paying unnecessary income taxes?
So to revisit the question one more time – should you hire someone to keep your small business bookkeeping? You think for a moment, and say Yes. Now what?
Let’s chat! Let’s talk about how WCG can provide timely and accurate financial statements… but let’s also talk about how we can help use those financial statements to leverage the most out of your dental practice. That’s the fun stuff. As mentioned before, we can provide expert dental consultation on top of the bookkeeping. Don’t forget that WCG is a full-service dental accounting firm with bookkeeping, payroll, tax return preparation and consultation.