HOW TO IMPROVE DENTAL PRACTICE ACCOUNTING AND BOOKKEEPING BY USING CLOUD ACCOUNTING TECHNOLOGY
Are you running your own dentistry practice and finding it hard to turn a profit? Are you sacrificing your own salary for the benefit of the practice or your employees? Or maybe you’re just finding it hard to keep track of the accounting, budget, expenses, and when all else is said and done taking what little is left as your pay?
When it comes to dentistry and dentists who run their own practices in Ottawa, this lack of a ‘profit first system’ is quite common. Being sure that you’re taking care of yourself and your pay first can be backwards thinking to what you’ve been engrained to believe. Especially when it comes to accounting for dentists in Ottawa. We’re taught to think that when there’s some profit, or extra money, after a good month, that we should put it into new equipment, supplies, or sometimes you even want to give your Dental Assistant the much needed raise he or she deserves.
In a profit first approach to your practice, there’s a few things to know before we continue. The way to approach profit first is a simple formula really:
Sales – Profit = Expenses
Essentially, what this means is after a month of work you’re going to pay yourself first. BEFORE anything else, including bills. Where normally, you’d pay your bills and expenses, then look to improve machinery or buy things you need for your practice before paying yourself. With this formula, you always pay yourself first, then you work with what you have left to handle all expenses. This means that you’re forced to find ways to save money. Yes, it can be scary, but you’ll thank yourself in the long run.
Time saved, is Money Earned
The less time you’re focusing on overseeing the books and budgets for your practice, is more time that can be put into growing your practice. Building a solid and consistent patient roster is a stronger investment than those countless hours you’d be doing diving into the financing. Let alone the stress of it all. Working with accountants for dentists like Numetrica City, we put that time in for you, like it’s our job…because it is!
Having a good accounting firm handle the day-to-day of your dentistry practice means that they’re taking care of the budgeting and reporting. They will also help you to be able to properly implement the 10/25 rule needed to move your practice’s accounting into profit first functioning. As well as then properly account for all the accounts needed to run a profit first practice, and keeping track of each of those accounts and the money that is moved into them every month. Which is a perfect lead in to the next reason why hiring an accounting for dentists in Ottawa firm is beneficial.
Deal with CRA so you don’t have to
An accountants for dentists firm for your practice will be able to properly work with all the requirements of the CRA. In doing so, this will keep you in compliance with the CRA and ensures that even your profit first practice and the accounts that you’re using are properly kept track of and every item is accounted for. A firm like ours at Numetrica City can also help when it comes time to file your practice’s business taxes with CRA every year, including showing you ways to save money.
Payroll is a Breeze
For most dental practices, payroll becomes a bi-weekly or monthly full time headache and all-consuming thing. In most cases, you have someone hired to handle both your day to day bookkeeping and also someone else to handle your payroll. When you hire an accounting firm, you’re getting two for the costs of one in most cases. An accounting from can handle all the necessary payroll for your dentistry practice, and do it effortlessly. Leaving you more time to focus on what matters, your patients. Another huge benefit in this area is that all the payroll taxes and accounting for those would be handled by the same people who are filing your CRA taxes and working with managing those areas of your practice. This just helps make your practice run smoothly and can give you ease of mind.
When you hire an accounting firm like Numetrica City to handle your accounting needs, you’re getting far more than just someone keeping track of your books. You’re getting a virtual CFO that will handle things like quarterly reports, budgets, profit and loss sheets, and the many different facets of financial management that you would get out of a dedicated CFO. This kind of work allows for you to see the health of your business throughout the year without having to be the one to stress about it. Plus, you’re getting financial guidance and advice to help grow your practice.
If you’re looking to move your dentistry practice into a profit first system, or just have better accounting practices, don’t wait, call Numetrica City today. Our accounting experts are exactly that for dentists in Ottawa… experts at what we do!
Buying a Practice?
- Buying a dental practice: This is a huge step and a professional dental accountant helps the dentist understand the financial implications of it from the cost to the property tax on any premises, to the human aspects, like payroll, staffing costs and lots more.
- Career planning: Dentists are often reluctant for various reasons, to sit down and map out a plan for their trajectory and most times want to focus on dental work itself. But once a dentist sits down with an accountant to note down their career goals, it seems like, a tremendous weight is lifted off their shoulders. Also, in tax and financial planning, dental practice accounting and bookkeeping is highly necessary.
Benefits of Professional Oversight
- Specialized tax accounting: Here, the professional dental accountant ensures that the dentist saves the most on taxes and also updates him on tax changes, as well as ensuring that his taxes are compliant with new laws.
- Advice before purchase of new equipment: the dental accountant familiarizes himself with the equipment and technology being utilized by the dental industry so as to help the dentist determine whether the investment will be worthwhile or not.
- Awareness: they assist the dentist in picking out common problems and mistakes that dental practices are prone to, guide them through these issues, help in budgeting their finances and plan purchases accordingly.
- Benchmarking: With dental practice accounting and bookkeeping, knowing the industry standards to compare with, would not be a challenge. The dental accountant is able to determine with your financial record, if your business is doing well or not, compared to other dental practices and also give you advice on how to improve management practices. Partnering, expanding one’s business and planning retirement are also some of the numerous benefits of dental practice accounting.
Cloud Accounting Technology
on the other hand, refers to software that can be used to store information online in such a way that it can be accessible by anybody, anywhere around the world. It is in a way, similar to traditional, desktop based solution with the difference being that it is hosted on remote servers. In cloud accounting technology, data is sent to the ‘cloud’ where it is processed and stored and the end user benefits access to real time data from anywhere with an internet connection and from any device, including laptops, smart phones and tablets, as well as, a greater visibility within an organization by the employees for a more effective collaboration. As for business owners, they often derive peace of mind knowing that routine maintenance and updates to the software are managed by the software service provider. With the introduction of cloud accounting technology, the ability for dental practitioners to engage and work intimately with their accountant has gotten better than ever before, as services which were previously seen as impractical and cost limited are now being delivered without much ado.
Cloud accounting technology as a tool for improving dental practice accounting and bookkeeping
- Creating a smart organization for a distributed workforce: With cloud accounting technology, accounting information stored in the cloud can be added or accessed anywhere, making it quick and easy for bookkeepers to complete their work regardless of physical location.
- Maintain relationships and verify discrepancies: Advanced cloud technology allow team members to search by virtually any term to locate a bill and identify whether it was missing or yet to be paid for, this enhances dentist-patient relationship.
- Application of a variety of secure applications: Cloud application such as QuickBooks online and Neat, not only provide access to information and documents from any device, but also integrate with other cloud- based tools to extract and leverage data across a number of different platforms, hence, reducing the time spent on manual data entry. Other numerous benefits of cloud accounting technology include accessibility, security, affordable cost and effective collaboration.
The emergence of cloud application technology has improved dental practice accounting and bookkeeping such that patient’s appointment which is an essential factor in dental practice can be easily booked and tracked. Also, with cloud application technology, patient’s record can be accessed wherever and whenever they are needed, which makes it easier for the dentists to continue the patient’s treatment without any loop holes. In addition, cloud technology can also be used to submit insurance claims, so as to generate bills for patients. Patient reminder, which is also a cloud application software helps to send automated reminders to patients, to remind them of the time they are due to come in, enhancing dentist-patient relationship.
Finally, tracking revenue, managing expenses, handling payrolls and more, which are the entities of dental practice accounting and bookkeeping can connect with online banking and other financial software so that all transactions made by the dentist are automatically entered, using cloud application technology, hence, making dental practice much easier and convenient for the dentist.