Running a dental practice has a lot in common with running any business. In addition to providing your patients with the best possible care, you must also manage the financial aspects of your practice, including keeping accurate records, paying your employees, paying down business loans, and much more.
At Titan Web Agency, we partner with dental practices to help them market their businesses to reach more patients and increase their profits. That includes providing advice in relation to the financial aspects of managing a dental practice. That’s why we’ve created this guide to help you select the best dental bookkeeping firm to help grow your practice.
Importance of Dental Bookkeeping
Why should I hire a dental bookkeeping firm for my practice? You may ask. Well here are some of the biggest advantages of doing so.
- Organization: Every dental office needs to have well-organized records that make it easy to access information when it’s needed. If a lender, an investor, your accountant, or the IRS needs to see your financial records, using a professional bookkeeping firm will ensure you can provide what’s needed quickly.
- Accuracy: A professional bookkeeping firm specializing in dental bookkeeping, will be able to create an accurate dental chart of accounts to track your income and expenses. It’s essential for your peace of mind to know that your records are accurate because you’ll use them to make financial decisions about your practice.
- Analysis: The records created and maintained by a dental bookkeeper can serve as a blueprint for achieving your practice growth goals. When you have the financial statements and reports you need, you can use them to analyze your past performance, predict future growth, and set a course to help you achieve your most important business objectives.
- Taxes: You have a legal obligation to pay your taxes, including income taxes and payroll taxes. An experienced dental bookkeeper will help you maintain proper records and ensure you remit payment to the IRS and your state taxing agency to avoid penalties.
- Time: Perhaps most importantly, a dental bookkeeping firm will manage your record keeping, so you and your staff can dedicate your time to patient care. You’ll be able to schedule appointments and keep your focus where you want it to be.
As you can see, hiring a dental bookkeeper can help you avoid financial mistakes, and ensure compliance with tax laws, while giving you the time you need to provide the best possible care to your patients.
Do I Need an Accountant or a Dental Bookkeeper?
A question we often hear has to do with whether it’s best to hire a dental accountant or a dental bookkeeper. The short answer is that you probably need both because they serve different purposes.
As we’ve noted above, a dental bookkeeper is responsible for creating and maintaining financial records, so you can track your income and profits and meet your tax obligations.
Their job is one that’s ongoing throughout the year and provides your accountant with the information they need to analyze your finances, provide tax planning tips, and so on.
A dental accountant is someone whose job is to analyze and interpret the data created by the bookkeeper. They can look at your financial statements and other reports, make recommendations about spending or investing your money, and help you with strategic planning to meet your goals. They can also assist you with tax preparation.
Another way to look at it is that a dental bookkeeper provides the raw material that allows a dental accountant to do their job. You need a bookkeeper to maintain your records and ensure their accuracy, and an accountant to help you with long-term financial planning, tax compliance, and more.
What to Consider When Choosing a Dental Bookkeeping Firm
Before hiring a dental bookkeeping firm, here are some of the things you should consider (and do) to ensure you find the right firm for your needs.
1. Expertise and Experience in the Dental Industry
The first thing you’ll need to consider is the bookkeeping firm’s experience and expertise in the dental industry.
While any bookkeeper can do some of the things necessary to organize and track your practice financials, hiring someone with specific industry experience is the best option.
As we mentioned above, one of the key duties of a professional bookkeeper is to create a chart of accounts.
You’ll need someone who understands the dental industry and can create an industry-specific COA to help you track your income and expenses.
Experience is also necessary because a bookkeeper without dental or healthcare experience may not understand industry regulations, including HIPAA compliance.
Some bookkeeping firms specialize in certain industries, including the dental industry. If a company doesn’t mention dental bookkeeping on its website, it may not have the experience and expertise you need to keep accurate records.
2. Reputation and References from Previous Clients
The dental bookkeeping firm you hire will be responsible for tracking your cash flows and expenses and possibly managing your payroll too. Therefore, hiring a trustworthy firm with a good reputation is essential.
There are several ways to validate the reputation of the firms you consider hiring. The first is to read online reviews and testimonials. Keep in mind that testimonials are usually solicited, and no firm will share a testimonial that isn’t positive.
That doesn’t mean that the company providing the testimonial isn’t trustworthy; rather, it means you should also seek unsolicited feedback as well.
Dental bookkeeping reviews can help you spot potential problems the firm’s clients have experienced. It will also give insight into how the firm responds to negative reviews.
If they respond professionally and encourage reviewers to contact them for one-on-one assistance, then it’s a good sign that they respect their clients and will respect you. If they don’t respond or respond defensively, you should look elsewhere to find the bookkeeping help you need.
We also suggest asking for references from each firm. Calling references will allow you to get a handle on what their experiences have been like and help you choose the right firm for your needs.
3. Ability to Use Technology and Automation for Efficiency
Bookkeeping technology has made the process of tracking accounts and inputting payments and expenses easier than ever.
Ideally, you should hire a bookkeeping firm that is comfortable with technology and automation and can use both to provide accurate and speedy services.
Bookkeeping firms may specifically disclose their familiarity with software like QuickBooks on their websites.
If they don’t, ask what technology and automation they use. You should also check to see if they have experience with your accounting or bookkeeping software.
In addition to promoting accuracy, using the right technology should translate to fewer billable hours because it can save time.
4. Data Privacy and Security Measures
Data privacy is a huge concern for anybody who treats patients and provides healthcare services. We’ll get into compliance later, but protecting your patients’ personal information is and should be a priority for every dental practice.
You’ll need to ask any bookkeeping firm you’re considering hiring about what they do to protect their clients’ data. Here are some of the common measures you should expect them to use.
- Collecting only data that’s needed.
- Providing full transparency on the data they collect and why they need it.
- Encryption is used to make it difficult for anybody to access or use data.
- Protecting data with a firewall, strong password, and multi-factor authentication, either with biometrics such as a fingerprint or a security code sent as a text to provide access.
- Using antivirus and antimalware software.
- Limiting access to clients’ data.
- Staying on top of all software and security updates.
You should also ask about how they would handle a data breach. Their answer should include a plan to contact clients immediately and notify them of the breach.
5. Availability for Communication and Support
There’s no point in hiring a bookkeeping firm if they don’t communicate with you regularly and make themselves available for support. Ideally, you will hire a firm where you have a single point of contact with someone familiar with your accounts who can help you if there’s a problem.
You may want to ask about how they communicate. For example, will they check in with you weekly or monthly? How and when will you receive reports? Of course, we also recommend paying close attention to how well they communicate during the evaluation process.
Are they quick to answer your questions and return phone calls and emails? If they’re not responding on time during the period you’re deciding whether to hire them, it’s reasonable to believe that they won’t be any better when you’re a client.
6. Local or Virtual Bookkeeper
When it comes to hiring a dental bookkeeping firm, you have choices. You can hire someone locally or choose a virtual bookkeeper, granting them remote access to your accounts. Each option has its benefits and risks.
A local bookkeeper can come into your office if you prefer or access your accounts remotely. You’ll have the option to meet them in person and visit their offices if necessary.
If you hire a virtual bookkeeper, you should plan on having a face-to-face interview via Zoom or Skype. Don't skip this step because you want to get a feel for the bookkeeper’s professionalism and ability to communicate.
7. Compliance with Industry Regulations and Laws
HIPAA compliance should be a primary concern when hiring anybody who will have access to your financial and patient records.
You have a legal and moral obligation to protect your patient’s personal health information and should not hire a bookkeeping firm that doesn’t make HIPAA compliance a priority.
In addition to asking about security measures, we recommend asking specifically about HIPAA compliance. You should ask if the firm has ever experienced a data breach or been charged with a HIPAA violation.
A “yes” answer doesn’t necessarily mean you shouldn’t hire the firm, but ask follow-up questions about when the violation occurred and what they’ve done to ensure that HIPAA compliance is a priority now.
8. Fees
Fees are a primary concern for many dental firms, particularly those relatively new, and may not have extra money to pay for bookkeeping services. Any firm you hire should be completely transparent about fees and charges. Most firms don’t list flat fees on their websites, so you’ll need to have a conversation about that in particular.
If a bookkeeping firm refuses to disclose fees or hedges when you ask about them, you should continue looking for a firm that isn’t keeping secrets. Some firms may charge on an hourly basis and others may prefer to work on a monthly retainer. You’ll need to think about which services you need and what makes the most sense.
When you ask about fees, we also recommend asking about any additional charges that might not be included in their regular fees. For example, do they charge extra for payroll or preparing reports?
Maximize Your Dental Practice's Financial Success with the Right Bookkeeping Partner
Hiring a dental bookkeeping firm to keep financial records and help you achieve your practice growth goals is a good investment. You can use this guide to research bookkeeping firms, evaluate their services, and choose the right bookkeeper for your practice.
Do you need help selecting a dental bookkeeping firm? Contact us for a free consultation today!
About the Author
Tyson Downs is the founder of Titan Web Agency, a company specializing in marketing for dental professionals. With an impressive track record of working with over 100 dental practices, Tyson has a deep understanding of the unique marketing needs within the dental industry. His expertise has helped numerous dental practices flourish by meeting and surpassing their revenue goals and established him as a thought leader in healthcare marketing. His insights and strategies have been featured in esteemed dental publications, including the American Dental Association and the American Academy of Implant Dentistry. Before dedicating his career to helping dental professionals thrive through effective marketing, Tyson honed his skills in SEO and web design as a freelancer, while also gaining valuable experience in the corporate sector. As an alumnus of Brigham Young University, he brings a strong educational background to his entrepreneurial endeavors. Outside of his professional life, Tyson is a devoted father of five, who cherishes time spent with his family, especially when they're all enjoying America's pastime on the baseball field.
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