How Professional Financial Services Accounting Benefits Your Dental Practice

Financial Services Accounting

Financial Services Accounting | Professional financial and accounting service firms offer a wide range of services. General accounting firms cater to every business. Their focus remains on accounting accuracy and tax compliance only. An industry specialist like a dental accounting firm can provide tailor-made accounting services for your dental practice.

Outsourcing accounting and taxation services offer many business advantages. These benefits can be enhanced by partnering with specialized service providers.

What to Expect From Financial Accounting Services for Dental Services

You are partnering with a dental CPA and accounting firm. As a valued client you can expect them to provide the best services that yield results. Dental CPAs possess industry knowledge of dentistry, the services and results must reflect that knowledge too.

The benefits will include acquiring professional services as well as industry benchmarking. You will get the dental-specific benchmarking information to devise an effective tax strategy and accounting practices that minimize your tax liability.

Financial Services Accounting Offer

Expect the standard accounting and financial services from a dental CPA firm. These services must include taxation, auditing, and assurance as well.

We will offer accounting and financial services for your dental practice including:

• Accounting and bookkeeping services
• Tax preparation and tax filing
• Cash flow management consultancy
• Advice on equipment financing
• Tax compliance
• Auditing and assurance
• Payroll services
• Financial planning and budgeting

Benchmarking with industry standards is an effective way of improving business efficiency. Dental practices are no exception to this rule. Industry benchmarking requires specific analytical skills and valuable data to formulate effective strategies. Dental accounting services can provide you the sound foundation of a successful financial plan. You can then work with us to elaborate on business areas of improvement.

Benefits for Your Dental Practice

Accounting function plays a pivotal role in financial planning for any business. Accounting methods, depreciation methods, and choice of debt structures also play important roles in formulating an effective financial plan. The benefits of partnering with professional accounting services are manifold. These advantages stretch beyond cost-effectiveness and time savings.

Improved Dental Services Efficiency

Outsourcing accounting functions to an industry specialist will ease up the workload from your management. Analyses and interpretation of accounting records will provide you with valuable information on cost drivers.

Professional accounting services that specialize in dental practices can identify the cost drivers that can be minimized. Timely and accurate financial reporting can save your management’s valuable time. Reducing the paperwork will speed up the accounting record processing too.

Improved Billing and Accounts Receivables

Accounting services are of no avail unless they can provide useful insights on business operations. One of the key areas for dental services to improve remains with billing and accounts receivables. As private practitioners, it remains of utmost importance to reduce the accounts receivable cycles. That improves the cash cycle and smoothens the operational efficiency.

Professional accounting services will offer valuable accounting reports to analyze billing and receivables functions. Improved collections will impact your tax liabilities as well. Avoid problems such as delayed estimated tax payments and payroll payments.

Dental Practices Industry Benchmarking

Access to industry benchmarking standards is perhaps the most important advantage that automation cannot offer. You wouldn’t have access to a wide range of data set to do it by yourself as well. A professional accounting service will provide you with industry benchmarks with integrity.

Cost-Effectiveness

Combine the benefits of accounting, taxation, and business consultancy services from an industry specialist CPA firm. The accounting and taxation services alone will outweigh the costs of outsourcing in the long term. The valuable business insights and compliance will realize the cost-benefits manifolds.

Focus On Growth

You cannot focus on dental practices and business growth unless you enjoy peace of mind with financials. A general CPA firm serving any industry cannot provide business consultation in dental practices. We believe you should focus on the core business activity and provide unmatched services to the clients.

The professional accounting services will improve your staff efficiency by reducing the workload. Improved collections, cost reductions, operational efficiency, and compliance with taxation will become the pillars of your growing dental practice.

The overwhelming dental practice routine demands focus and energy for providing the best services to the clients. We aim to help you in achieving that goal.

Tax Management in Dental Practices

Minimizing tax liability and maximizing tax savings remains a challenging task for all businesses. Accounting and financial records set the basis for taxation management. Tax management includes tax planning, filing, and representation of your dental practice. A professional accounting service will lead you through the complexities of tax management in dental practices. The key to success here will also be our in-depth industry knowledge. We will ensure to minimize the tax liability without a compromise on tax compliance.

 

Contact Ash Dental CPA for a complimentary consultation. New clients are welcome. Call (508) 458-6789.

Dental Accounting Framingham: Improve Your Dental Office’s Cash Flow for 2021

Dental Accounting Framingham

Dental Accounting Framingham | We all had one of the toughest years of our lives since the Covid 19 pandemic days. The Dentistry profession is one of many businesses affected directly by the pandemic restrictions.

Government and medical regulatory authorities’ restrictions meant dentists could no longer practice as usual, apart from emergency cases. Fortunately, restrictions have lifted but recovering from the financial set back is needed for 2021.

The Financial Impact of COVID-19 on Dental Practices

Before we talk about a financial recovery plan, let’s take a look at how things have shaped up for the dental practices across the US since the early pandemic days.

Back in the last week of March 2020, only 5% of dental practices were open with “usual business”.  76% of the practices were seeing emergency patients only.

Fortunately, the situation has improved a lot since then. 33% of the business as of the second week in November 2020 have reported normal operations while 65% have been back to business with lower volumes of patient visitors.

There is much to elaborate on from these numbers though. As you can see the normal businesses’ curve dipped to lower rates after nearly getting to the 50% mid-year.

The economic impact of such a lower level of activities is beyond recovery in the near future. Even if dental offices return to normal, the customers’ confidence and economic powers will take time to restore the operations fully.

Unlike other businesses, there was little to go-by with the telemedicine and remote working business model for the dentistry sector too.

The full impact of the Covid 19 catastrophe for the dental practices will go beyond merely opening the offices again. Here is the other side of the picture so far.

Until recently, 50% of the total dental practices reported up to half of the patient volume. The rest of the 505 includes a cast majority (28%) with a patient volume of less than 100% too.

So how do you overcome the economic pitfall? Find out below.

Bouncing Back From the Financial Impact In 2021

You may currently have a moderately aggressive and fairly competitive financial model for your dental office. You’ll certainly have to make some quick changes to your financial model to make a strong come back in the year 2021.

Remodel Your Financial Plans

By financial plans, we mean the dentistry fee structure and payment plans too. If you’ve been into the annual budgeting, it’s time to create one. You wouldn’t have planned this much earlier for a tax planning purpose, but we all live in unprecedented times now.

Here are a few tips on your financial remodeling:

• Review your Fee structure and adjust it with the future economic forecasts in the mind
• Revisit your payment term plans and recovery methods
• Revise your accounts receivables more aggressively from existing customers
• Rethink your capital expenditures and financial budgeting model
• Avoid credit extensions and minimize the receivable delays
• Talk to a bank vigilantly on refinancing your business loans
• Talk to your regular clients about your new payment terms and communicate effectively

This seems a complicated task, rather it seems a collection of several financial plans rather than just a single comprehensive one. That’s right, this where you can think of a specialist to help you out of this financial imbroglio.

How a Dental CPA Can Best Assist Dentists

Dental Accounting Framingham | A dental CPA is perhaps your best option for financial recovery after a devastating financial last year. Dental CPAs are well-informed on accounting and financial resources as well as the practical requirements of the dental businesses.

Accountants and CPAs can offer you expert advice on tax credits and bookkeeping requirements. A dental CPA can offer you specialized and tailor-made advice that best aligns with the industry practices.

Benefits of choosing dental accounting Framingham

Evaluate the financial plan

Without an objective evaluation of your financial plans, there wouldn’t be an easy way out for the future. Talk to a dental CPA on your value-for-money aspects of the business.

Whether you have been allowing a relaxed payment plan or deferral receivable, it’s time to rethink it. You’ll need to follow an aggressive billing and payment recovery plan from now onwards.

Spend wisely

You can plan a financial annual budget with a dental CPA. You’ll need to spend the business money where it matters the most. Perhaps, you’ll need to renegotiate contractual terms with medical suppliers and banks about loans.

You may have planned for office renovations or buying new equipment. It may be wiser to defer a few expenses for the time-being or utilize a leasing option. Let’s talk about it…

Maximizing the Cashflows

Primarily, there are two ways of cash flow maximization for any business, increasing sales and decreasing the receivable times. The best option is to find an optimum balance in both choices.

You can’t reduce your fee structure straight away, neither can you increase the patient’s visiting frequency quickly. Perhaps increasing the payment frequency is one thing where you can find a reprieve.

Tax Planning

Effective tax planning is an ongoing concern for dental offices rather than a Covid-19 recovery tool. However, there are certain tax provisions and tax deductions under the CARES and other relief options that will incur tax implications for your business.

Learn More

The road towards economic recovery is an uphill task, but together with sound financial planning, we can achieve success. Request a complimentary consultation from Ash Dental CPA. We have over 20 years of experience assisting dentists. Call (508) 458-6789 or request an appointment online. New clients are welcome.

Why Tax Planning for Dentists is Important

Tax Planning For Dentists

Tax Planning For Dentists | Tax planning for any business provides a proactive approach with financial and non-financial benefits.  Service businesses and healthcare practitioners such as dentists would also benefit from proper tax planning.

If your dentistry business has been relying on accounting software tools, the complications of recent Covid 19 impact and tax changes would require much comprehensive planning than calculations.

First thing, tax planning is a strategic plan, not an operational or tactical. The same holds for the dentistry businesses. Your tax planning strategy must incorporate the challenges and unique business model in the industry.

Perhaps you’ll be better of discussing the strategy with a dental CPA or a professional with relevant expertise.

Here is our preview of why your Dentistry business may need a sound Tax Plan.

Tax Planning Is Strategic

If you think of tax planning for dentists as a tool of reducing the tax obligation only, give it a second thought. For a private business like dentistry, tax planning must be executed on a long-term basis.

For example, your entity structure will impact the tax returns for both your corporate and individual taxes.

Some key points where your tax planning will affect your business on an ongoing basis:

• Income taxes with a business ownership structure such as a C-Corp, S-Corp, LLC, etc.
• Employer Social security and Medicare taxes
• Federal Income Tax withholding
• Retirement planning

Your business expansion, employee retention, purchase of new supplies and equipment, all have tax implications.

The fee structure and your sales volume will impact your tax returns. In other words, think of tax planning as a core part of your business strategy.

Focus On The Core Of The Business

Perhaps it’s easier to say for every business, even important for a medical profession like dentistry. If you plan ahead of time, consult a tax specialist to make a comprehensive tax strategy, it will save you tons of time and cost.

Monetary savings wouldn’t weigh for much if that makes you focus on the core aspect of your business. Would it?

By proactively managing your taxes, you’ll be staying ahead of the competition. You wouldn’t want to receive a tax bill notice from your accountant in the last quarter of the tax year.

Tip: A good accountant can also help you determine the cost of the time you spend on your tax calculations.

Tax Planning For Dentists Will Help Your Practice Management

There are tons of financial and taxation aspects that consumemost of your time while running an already hectic business.

Tax planning and advisory can make you feel at home. But what’s in the practice management for tax implications?

Here are a few points where an effective tax plan can help you with your dental practice management:

• Capital finance structuring- (You already know the interest paid on a bank loan is tax-deductible).
• Business acquisition, partnerships, or merger tax implications
• The business expense and overheads management
• Sales and profit maximization
• Employer retirement and social security contribution planning
• Retirement and estate planning as a business owner (partner)
• Billing and insurance management
• Accounts receivables and collections

The list can go on as there are a number of business management benefits that come with proactive tax planning.

Tax Planning and Compliance

Again, the benefit of tax planning doesn’t come exclusively for your dental business only. Yet it remains one of the most important points for having an effective plan.

Regulatory compliance is often challenging and becomes a perplexing job if you can cope with the changing tax regulations.

Calculating intangible asset valuation and business Goodwill requires expertise. Service businesses such as dental practices rely heavily on business goodwill.

In a situation, like the currently pandemic caused recession, the business goodwill may significantly fall in a short time. Intangible asset amortization and tax deductions become complex in such scenarios.

Tax compliance regulations call for accurate income realization, whether you earned it with a passive investment or direct business income.

Similarly, your tax deduction regulations change over time. For example, you can currently deduct charitable contributions without itemizing the costs.

Have you ever been in a complicated position to calculate accurate estate and gift taxes? These expenses reduce your tax liability, but not all expenses are deductible under corporate tax returns.

Tax Planning Helps You in Retirement Planning

In addition, tax planning helps you with your financial life goals. Retirement planning remains the key to achieving financial success over time. Therefore, your retirement plan may affect the tax returns for you as an employer and your employees.

For example, a simple IRA plan and SEP come with different maximum contribution limits for an employer.

Also, tax planning requires long term planning. Furthermore, most of the financial planning and strategic business decisions directly affect the tax returns you file by the end of the year.

Learn More

Contact Ash Dental CPA to learn more about tax planing for dentists. We offer an array of accounting solutions for dental practices of all sizes. Call (508) 458-6789 or request an appointment online. New clients are welcome.

Key Bookkeeping Terms Every Dentist Should Know

Bookkeeping

Nothing brings a growing dental practice to a screeching halt like cash flow problems. Basic bookkeeping errors can create a cascading effect, resulting in severe financial problems. As a dentist, you are an expert at your craft. You know all about keeping teeth healthy. Unfortunately, dentists are not normally aware of the needed steps in creating and maintaining an accurate bookkeeping system so that they can become fully aware of the true financial status of their dental practice.

As a dentist, here are a few bookkeeping terms that you should be aware of:

Cash Flow and Profit. There Is a Difference.

Dentists, and the staff that they rely upon to keep their books, are not typically aware of how to read and truly understand financial reports. When you ask for certain information for a particular time frame from your bookkeeper, you may be provided instead with profit figures. You may mistakenly believe that this represents the amount of cash available to you. But this profit number is not representing the available cash for purchases. This can lead you to mistakenly make purchases, incurring significant charges and overdraft fees.

Profit comes from revenue less expenses over a given time frame. The term “cash flow” refers to the money that moves to and from your business throughout the month. Your profits will be determined once you have completed a profit and loss statement. Once you complete your cash flow equation and factor in inventory, accounts receivable and depreciation expenses, you can determine your cash flow.

Chart of Accounts

An industry-standard chart of account is necessary for tracking the amount of money that your practice has spent or received, as well as for the preparation of financial reports. When you establish your accounting system, special accounts must be created based upon dental industry standards. Dentists commonly mistakenly use a general chart of accounts, resulting in an expensive mistake since you will not have the insight necessary to effectively streamline and grow your dental practice.

Closing the Books

You should be closing your books on a monthly basis. This activity includes the reconciliation of various accounts, preparation of your financial statements, and more. You should not be entering transactions after closing your books.

A common mistake that dental practices make is mistakenly entering transactions from a previous time period. This leads to adjustments and balances that do not match the financial reports or bank balance. Left undetected, this causes all future reports, cash figures, and tax documents to be incorrect. This is a costly mistake that can result in harsh IRS penalties.

Importance of Partnering with an Experienced Dental Accountant

When you work with an accountant who has a specialty in dental bookkeeping, you can be assured that you are fully aware of the financial condition of your practice. This means that your financial statements will meet IRS guidelines, General Acceptance Accounting Principles, and dental industry standards. Contact Ash Dental CPA to learn more about customizing your accounting services. 

Bookkeeping for Dentists: Prioritizing Your Practice for Maximum Success

Bookkeeping for Dentists

Your professional training is as a dentist, not an accountant. Should you really be handling your own bookkeeping? There are many advantages to hiring a professional that specializes in bookkeeping for dentists.

You didn’t go through the time and effort of attending dental school so that you had to worry about the hassles of tax preparation and bookkeeping. It doesn’t matter how skilled you are with dental instruments, your practice requires solid financial management to remain profitable and survive.

Although you are rightly focused on your patients, your dental practice is ultimately a business. By neglecting or ignoring the financial aspects of your dental business, you will be compromising patient care. So although considering messy things like margins, revenue and reconciliation may not be what you love, it is completely necessary so that your patients receive outstanding care for their mouth, teeth, and smiles.

Hiring a Professional

Although you are intelligent and are likely completely capable of taking care of your own bookkeeping, you should ask yourself if you should be the one handling it. Just because you can do something does not mean that you are the best person for the task. Intelligence is no substitute for the training that a skilled professional bookkeeper has at their disposal. In the same way that bookkeepers do not take dental work on themselves, you should not be dealing with the hassles of your own bookkeeping.

Depending upon the size of your practice and its associated resources and needs, it may make sense to hire more than one professional bookkeeper. By going with multiple professionals, you can help to prevent nasty things like fraud and embezzlement, as well as expensive mistakes. While you do not need to hire a massive team of accountants, some oversight may prove valuable.

Begin with a Contract

In most cases, dental practices do not require a full-time bookkeeper to maintain their financial houses. But it is not uncommon for dental practices to have an office worker who spends several hours a day performing these types of functions. For these practices, it would be beneficial to hire a professional so that they are not paying someone to pore over paperwork for eight hours a day when only two were needed. You would only be paying for the amount of work that you require and receive.

Going Virtual

In the age of the Internet, bookkeeping for dentists can be performed remotely. One benefit of going with virtual services is that you have access to a much deeper talent pool.

Instead of carefully searching in your local newspaper for a reliable bookkeeper, you will have your pick of the finest financial professionals in the industry. This gives you a better chance of locating a bookkeeper with a specialty in dental administration.

Bookkeeping for Dentists Next Steps

As with any small business, your dental practice does not need expensive audits, hidden embezzlement, or simple inefficiency. Consider the dental health of your patients. A closed office cannot fill a cavity, perform a root canal, or set a crown. Inappropriate dental instruments can lead to undesirable health outcomes, but so do improperly maintained books. By going with a virtual bookkeeper, both you and your patients will keep a smile on your faces.

Contact Ash Dental CPA to learn how your practice can benefit from customized accounting services. Call (508) 458-6789 or book online here.