Common Mistakes Dentists Make When Managing Their Accounts

Exceptional Accounting Services |


As dentists, the oral health of your patients is paramount. However, while you focus on the patients that come in for treatment, putting your accounts and finances on the back burner isn’t a great idea. Doing so can lead to improper income and expenditure tracking, which can leave a major cavity in your bookkeeping.

Often simple bookkeeping mistakes can cause a ripple effect that results in severe financial problems. The tax and business side of dentistry is a very specialized area, and nothing will cripple a growing dental practice faster than having cash flow trouble.

At Exceptional Accounting Services, we work with a lot of dentists and found that while dentists are experts at their craft, they lack adequate knowledge of dental accounting and tend to make some costly mistakes. If you’re a dentist, we want to help you avoid these mistakes, which is why we have compiled a list of the most common mistakes dentists make while managing their finances.

1. Neglecting profit and loss.

We have found that many dentists we work with don’t look at their profit and loss on a regular basis, but rely solely on cash flow to determine what money can be spent and drawn from the business. Profit and loss are equally crucial to a dentist’s clinic. 

2. Not reviewing accounts receivable.

Many dentists fail to review their accounts receivable on a consistent basis which causes their collection rate to dip below the average, resulting in a shortage of cash and income.

3. Using your admin staff as accountants. An admin is hired to handle the smooth running of the dental clinic, taking appointments, handling patients’ inquiries, etc. Dentists forget that their admin is not officially trained or qualified to manage accounts and get them to handle bookkeeping although they don't have the accounting background required to provide accurate accounting services.

4. Not having a professional CFO to handle accounts. Many dentists don’t employ a CFO to review their books consistently resulting in occasional updates on their accounts and a backlog on their taxes. As a CFO and a CPA, we can help dentists reduce expenses, plan a budget for the future and analyze key performance indicators to assist in making decisions with their future in mind.

5. Not considering hiring an accountant. Not employing or hiring an accountant for your dental clinic could have irreversible repercussions like running at a massive loss due to the neglect of proper updating of accounts. This is something that may prove to be detrimental to your dental practice in the long run.  

If you’re looking to avoid these and other accounting mistakes, reach out to the experts at Exceptional Accounting Services. As one of the best full-service accounting firms in America, we will successfully help you get your accounts updated and back on track. Our expertise lies in small business accounting, payroll, financial statement preparation, cash flow management, new business formation, and QuickBooks services. For a complete list of our account services, please click here. If you have any questions about accounting, we’d love to hear from you. Please contact us here.