While the work of doctors or dentists is to help people look good and healthy, the work of a medical or dental accountant is to maintain their business’s financial health.
In comparison to other types of businesses, medical and dental practices have special needs and requirements. Thus, medical or dental accounting can be complex and unique.
If you are a medical or dental accountant, then here are some of the accounting tips that you can use for the long-term success of your client’s business.
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Introducing cost-cutting
You must analyse the vital areas where costing can be optimised and discuss this with your client. Keeping the expenses to a bare minimum and taking strategic measures for cost-cutting can help your clients increase their profit margins in the long run.
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Using accounting software
You can take the help of accounting software to process all the financial transactions efficiently and quickly.
Using accounting software has the following benefits:
- It is easy to keep the records updated.
- It reduces the scope of human accounting error and improves accuracy.
- Automation of processes saves time.
- It provides comprehensive financial reports timely that can lead to better decision making.
- It can make data accessible by storing all the financial information in one place.
- It ensures the security of critical and confidential data.
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Purchasing equipment
Unlike the equipment in some other industries, the health care practices’ equipment can not be second hand or outdated. They need to be up-to-date and should follow all the safety standards.
Due to this, purchasing equipment as per the latest technology involves huge cost for medical and dental practices. You have to counsel your client on how to purchase equipment from qualified vendors and inspect them regularly.
You can also advise them to use a lawyer to check whether the equipment is compliant with the medical standards or not.
You can consilder utilising allowances, like Investment allowance to reduce the corporation tax.
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Reconciling the financial records
Reconciliation means comparing two sets of records to ensure that their figures match. It is essential to reconcile the financial records regularly to spot any unusual transactions.
You can assist your clients in better decision making if you can recognise any inefficiencies through reconciliation.
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Checking for internal issues
As a medical or dental accountant, it is your responsibility to keep an eye out for any potential error or fraud in your client’s business. You need to remove or minimise the internal issues to protect your clients from any financial malpractice.
Common mistakes to avoid during dental accounting
If you have your dental practice and don’t want to take the help of a professional accountant, you need to be very careful while managing your business accounts.
Some simple accounting errors can cause serious financial problems for your business. Here is a list of the common dental accounting mistakes that you should avoid.
- Not separating business and personal finances
Having a separate bank account for your dental practices can help you to separate your personal and business finances. This will avoid any confusion or mix up in the future
- Getting confused between cash flow and profit
Cash flow is the money that moves in and out of business for a given period. On the other hand, profit is the amount left after deducting expenses from revenue in a given period.
The profit of your business is not the cash available for incurring extra charges.
- Overlooking profit and loss
Instead of just relying on the cash flow, you also need to pay heed to the profit and loss of your business to determine your business financial health.
- Not using the chart of accounts as per the industry standard
The chart of accounts is a tool for preparing financial reports by tracking how much money is spent and received. It is essential to use a chart of accounts that is up to the dental industry standard instead of using a general one.
- Not using accounting software
Dental accounting using simple spreadsheets is time-consuming and may lead to errors. Instead, you can use accounting software to run your operations smoothly.
- Recording the transactions in the wrong period
You must “close the books” monthly to perform functions like preparing the financial statements, reconciling the accounts, and more. You must ensure that no transactions are being entered in that closed period.
- Not hiring a professional accountant
Not taking the help of an accountant, especially when you don’t understand the basics of dental accounting, can prove destructive for your practice.
Professional accountants are qualified to manage the accounts and can prepare accurate financial statements for your business. This can help you to save time and money and enjoy the benefits of tax deductions. Hiring experienced and reliable accountants in central London can help you to operate effectively and smoothly.