Though industry figures vary by year, most statistics indicate that there are more dentists practicing in California than virtually any other state in the country. This often equates to stiff competition between dental practices, underscoring the importance of strategic financial planning – particularly in light of complicated insurance regulations affecting billing and other transactions. In such a complex and competitive business environment, it is critical for California-based dentists and dental practices to use detailed, meticulous methods of accounting, bookkeeping, business planning, and tax planning. If you operate a dental practice in the Sacramento or Roseville region, or if you are planning on opening your own dentist office in the near future, consult with our Sacramento CPA firm for guidance in helping your practice thrive. In the meantime, this article will help you learn some basic accounting tips for California dentists.
3 Dental Accounting Tips for Dentists in CA
You probably entered the dental industry because you were passionate about helping people get healthy and look great. After all, if you wanted to spend your workweek sorting through balance sheets and payroll reports, you would have gone into accounting, not dentistry. However, while accounting is likely among the least exciting aspects of running your dental practice, it is also among the most important. This is particularly true if your practice is still in its nascent stages, when early business planning decisions can chart a course toward long-term success – or an early economic demise. Fortunately, following some simple accounting tips will bolster the odds that your practice will flourish.
Dental Accounting Tip #1: Implement strategic cost-cutting measures. Minimizing expenses is fundamental to the success of any business. However, dental practices are challenged in that purchasing costly medical equipment is unavoidable. Though you cannot avoid the need to purchase expensive dental equipment, you can reduce your accounting costs by hiring a skilled bookkeeper. Taking a DIY approach to bookkeeping is highly inadvisable for dentists, because it increases the risk of incurring financial losses caused by avoidable mathematical errors, lost opportunities to claim tax credits and deductions, and even embezzlement by employees. A bookkeeper can immediately spot and resolve discrepancies while keeping you alerted of suspicious activity.
Dental Accounting Tip #2: Learn key financial terminology, like the difference between profit and cash flow. “Profit” is the surplus that remains after your expenses have been subtracted from your practice’s revenue. By comparison, “cash flow” refers to money coming both into and out of your practice. Even if your practice is profitable, having inadequate cash flow can lead to an inability to cover your operating expenses – which, for dentists, are high. It’s critically important to familiarize yourself with accounting and bookkeeping terminology in order to avoid misunderstandings that can lead to financial disaster.
Dental Accounting Tip #3: Take advantage of accounting software to help you manage your records. You can increase efficiency, reduce the likelihood of accounting errors, and keep better track of your losses and profits by learning how to use accounting software that is appropriate to the size and volume of your business. For most small business owners, the optimal software is QuickBooks. Cook CPA Group provides a range of dentistry-oriented QuickBooks services in Sacramento and Roseville, and can train you and your employees to use and customize the software to your changing needs.
Tax and Business Accountants Serving Dental Practices in Sacramento and Roseville
At Cook CPA Group, we understand that California dental practices face unique financial challenges when designing business strategies for long-term success in the healthcare industry. Equipped with over 20 years of experience serving dentists, dental insurance billers, and dental insurance companies, our CPAs and business consultants are ready to help you meet these challenges head-on.
Our trusted CPA firm provides an array of personalized accounting, bookkeeping, and tax preparation services for small to mid-size dental practices, including:
- Business Consulting Services in Sacramento
- Business Planning Services in Sacramento
- Small Business Accounting in Sacramento
- Tax Preparation Services for Businesses in Sacramento
In addition to our Sacramento accounting services, we also work with dentists throughout the Roseville, CA area.
Whether you operate an established dental practice that is in need of a complete systems overhaul, or you require financial guidance because you are planning to open a dental office for the first time, we will sit down with you to pinpoint your vulnerabilities, identify your strengths, and design a customized business plan for reduced waste, increased profitability, and total compliance with IRS regulations and the U.S. Tax Code. For a free consultation about the California tax and accounting services we offer dentists and dental groups, call the Sacramento CPAs of Cook CPA Group at (916) 724-1665 today.