Bookkeeping for a Dentist Business

Bookkeeping for a dentist’s business involves keeping accurate records of financial transactions, including income and expenses. Here are the steps to follow to set up a bookkeeping system for a dentist business:

Bookkeeping for a dentist business is slightly different from bookkeeping for other industries. Most of the services provided by a dentist is exempt from GST/HST; however, there are certain products and services that are taxable for GST/HST purposes. It could be challenging if your bookkeeping is not set up properly to claim the appropriate amount of Input Tax Credits (ITC) which you are entitled to. A dentist practice also hires an employee or a sub-contractor to provide services to its clients. A bookkeeper needs to set up transactions properly and also provide guidance or seek advice from the accountant of the business in order to avoid any tax issues related to employees vs. the sub-contractor.

Services provided by Dentist

1- Teeth Cleanings
2 - Regula checkups
3 - Teeth Whitening
4 - Extractions
5 - Veneers
6 - Fillings
7 - Crowns
8 - Root Canal
9 - Braces/Invisalign
10 - X-rays
11 - Root canals
12 - Tooth removal
13 - Gum surgery
14 - Some tooth replacement options
15 - Bonding
16 - Dentures

Usually, supplies used by the a dentist practitioners are adhesives, rolls, dental equipment, Handfiles, Instruments, pins & posts, dental needles, dental / stoma, sutures, extracting forceps, gelatine sponges, latex-free gloves, saliva ejectors, cavity liners & cement, dental bibs, dental burs, dental polishing discs, crown & bridge products, cosmetic dentistry, dental anesthetic, dental tray Covers, endo irrigation syringes, endodontic files, endodontic syringe with needle, pulp canal sealers, impression materials, tissue mana, etc.

Steps involve in the bookkeeping

Choose an accounting software: You can choose accounting software such as QuickBooks, Xero or Wave, which are suitable for small businesses.

Set up a chart of accounts: A chart of accounts is a list of categories that you will use to organize your financial transactions. Common categories for a dentist business may include revenue, dental supplies, rent, utilities, payroll, and marketing.

Record income: Record all sources of income, including payments from insurance companies, patients, and other sources.

Track expenses: Record all expenses associated with running the business, such as rent, utilities, dental supplies, payroll, marketing, and other expenses.

Reconcile bank accounts: Reconcile your bank accounts regularly to ensure that your records match your bank statements.

Prepare financial statements: Prepare monthly or quarterly financial statements, including a balance sheet and income statement, to help you track your financial performance and make informed decisions.

Stay organized: Keep all receipts and invoices organized and easily accessible, so you can quickly and accurately record transactions.

It is recommended to seek advice from a professionally qualified accountant to help you set up your bookkeeping system, prepare financial statements and ensure that your business is compliant with tax laws and regulations. By keeping accurate and organized records, you can manage your cash flow, make informed financial decisions and help your dental business grow.

Bookkeeping tailor has all resources to set the best practices in your bookkeeping system and run it smoothly.