The Benefits of Outsourcing Accounting and Bookkeeping for Your Dental Practice

There are many benefits to outsourcing your accounting, bookkeeping, or payroll to a team of CPAs that specialize in dental practices.

By outsourcing your accounting and bookkeeping to a team of expert Dental CPAs, you have more time to grow your business. It also saves you money and reduces stress, while providing you with accurate financial records, forecasts, and reports. 

Outsourcing leads to better tax planning, ensures taxes are filed on time, and allows you to make smart decisions as a business owner – because you have accurate, timely financial data and access to a team of expert advisors.

In this blog post, we’ll explore the benefits of outsourcing the accounting and bookkeeping functions of your dental practice.

Reasons to Outsource Your Accounting and Bookkeeping

Firstly, let’s discuss what outsourcing is when it comes to accounting and bookkeeping.

Outsourcing is when you hire an external accounting firm to manage your accounts for you on a weekly, monthly, or quarterly basis. It frees up your management team and staff to focus on growing your dental practice.

Basic Bookkeeping for Tax Compliance 

The purpose of bookkeeping is to provide timely and accurate financial data to support effective tax-planning and higher-level business management analysis. While many dentists manage their own bookkeeping, they rarely do their own accounting and management analysis.

We understand some dentists like to manage their own bookkeeping to feel in control and oversee day-to-day finances. However, there is a large opportunity cost involved as you could earn much more in your role as a dentist or by managing your practice.

Management Accounting for Cash-Flow and Decision-Making

Dental CPA firms can produce high-level management reports to help with improving cash-flow and making smarter business decisions. As a dental practice owner, you can get a better overview of your business by reviewing these reports, instead of focusing on the transaction-level details. Plus, you can always request the transaction-level details as needed from your Dental CPA. 

Saves Time, Money, and Reduces Stress

Outsourcing accounting and bookkeeping can save time, money, and reduce stress for dental practice owners. Instead of hiring and training an in-house accountant, dental practices can partner with an accounting firm to gain access to professional, expert advisors who specialize in these areas.

This reduces ongoing staff costs while also minimizing the risk of fraud and security breaches, which often occur when you have an internal accounting team.

Additionally, accounting firms offer flexible pricing options, allowing dental practices to pay only for the services they need, when they need them.

Access to a Team of Expert Dental CPAs

Outsourcing accounting and bookkeeping to a team of Dental CPAs gives you access to experts who can identify areas to maximize profits, cut unnecessary expenses, and accelerate growth in your business.

Dental CPAs are knowledgeable and experienced in accounting, bookkeeping, tax, and financial reporting specific to dental practices. They can help you reduce unnecessary taxes through tax planning, ensuring taxes are filed on time with the IRS, and delivering detailed financial reports and budgets. This helps you solve problems and make more educated business decisions based on data.

Dental CPAs can advise on the most tax-efficient ways to structure a practice, or the best ways to expand your dental practice. They can also help dental practices negotiate better terms with vendors and suppliers, which can result in lower costs.

Additionally, most Dental CPA firms are up to date with the latest standards and technologies. While they’re happy to follow your process and work as an extension of your team, they can also implement new technology-driven processes to improve your service levels, reduce costs, and boost your competitiveness – setting you up for growth you otherwise may have missed.

Improved Accuracy and Compliance

Many dental practice owners manage their own accounting and bookkeeping. If you’re not an accountant, transactions may be misclassified, incorrectly expensed, and opportunities missed. By outsourcing your accounting and bookkeeping, you can improve the accuracy and reliability of your dental practice financial records and reports.

Untrained or entry-level bookkeepers tend to focus on the Profit and Loss transactions and ignore Balance Sheet accounts – which are critical to management and important for cross-checking accounting accuracy. At the end of the reporting period, the Dental CPA often spends time fixing bookkeeping errors which adds to your accounting fees.

Dental CPA firms have established procedures and quality control measures in place to ensure that financial records are accurate and compliant with accounting and tax regulations. This can help you avoid costly mistakes and penalties.

Outsourcing to a Dental CPA firm is beneficial because they keep up-to-date with changes in tax laws and regulations, ensuring that your practice remains compliant with all relevant tax legislation. This is especially helpful if your practice operates in multiple states, as tax laws can vary widely between jurisdictions.

Increased Focus on Your Dental Practice

By outsourcing your accounting and bookkeeping, you have more time and resources to focus on your core business activities, such as providing quality dental care to patients, improving customer service, and implementing marketing strategies.

Dental practices can outsource tax, accounting, bookkeeping, payroll, and CFO services to a Dental CPA firm. This reduces your internal administrative workload and increases productivity and efficiency for your staff – which leads to increased profits. By outsourcing non-core business activities, you can improve customer satisfaction and increase revenue by offering additional dental services.

By focusing on your strengths as a dentist practice owner, you can invest your time where it matters most.

Better Financial Planning and Decision-Making

Outsourcing can lead to increased profits and better business decisions. By outsourcing your financial processes, your Dental CPA can identify areas to reduce costs and improve profitability on a regular basis. This can be achieved through accurate and timely invoicing, regular review of financial data, effective management of debtors, and software implementation.

Outsourcing accounting and bookkeeping can provide valuable real-time financial insights and analysis. Dental CPA firms can help you identify trends, opportunities, and challenges in your business. They can also provide customized financial reports that are tailored to your dental practice – for better decision-making and financial planning.

For example, you may need to track metrics and KPIs such as new active patients, phone answer rates, or your collections ratio. A Dental CPA firm can provide reports that track these metrics and provide insights into how they can be improved.

In addition to providing financial reports and analysis, Dental CPA firms can also help dental practices with budgeting and financial projections to plan for the future. This is especially important for dental practices that are looking to expand or invest in new equipment or technology.

Conclusion

Outsourcing accounting and bookkeeping to a team of expert Dental CPAs can provide many benefits for dental practices. It saves you time, money, and reduces stress while ensuring accurate financial records and reports.

Dental CPAs can provide specialized insights and analysis that can help you make informed decisions about budgeting, expansion, and growth. By outsourcing your accounting and bookkeeping, you can focus on providing quality dental care to your patients, while your team of Dental CPA advisors manage the financial health of your business.

To find out more about outsourcing your dental bookkeeping and accounting – contact us today.