Dental practice accounting and bookkeeping: what to track and how to choose a bookkeeper
By Sam's List team. Short answer: Dental practice accounting and bookkeeping involve the work of recording, categorizing and reconciling a practice’s money in an accounting system (usually QuickBooks Online or Xero), kept separate from the patient production and insurance data that lives in practice management software. The books should show what was collected, what it cost to deliver care, and whether each location (if you have more than one) is paying for itself. Tax filing and tax planning stay with a CPA; many dental bookkeepers, including Digit Squid, do not do tax work.
The two systems: practice management vs the accounting ledger
Most dental offices run two systems: practice management software (examples include Dentrix, Eaglesoft and Open Dental) tracks production, scheduling, insurance claims, patient balances and clinical activity; the accounting ledger (QuickBooks Online, Xero or similar) tracks bank and card activity, payroll, lab bills, rent, supplies, loans and the profit and loss statement. Production and collections from the practice software should reconcile to deposits and insurance payments in the books.
What to track every month
Track these as dollars and as a percent of collections: collections vs gross production (and the collection ratio); insurance vs patient payments; clinical vs admin payroll; associate dentist pay; owner pay; clinical supplies and lab fees; occupancy, marketing, software, merchant fees, insurance; equipment leases and loan payments shown separately; cash on hand. This guide does not publish benchmark bands.
Multi-location practices and groups
One legal entity vs a separate entity per location; a management company and/or property company above the clinics; a P&L per location plus a consolidated view; shared costs allocated on a written rule. Ask how a bookkeeper reports multi-entity groups before you hire.
Bookkeeper vs dental CPA vs fractional CFO
A dental bookkeeper categorizes, reconciles, runs the monthly close and location P&Ls. A dental CPA handles the tax return, entity choice and tax elections. A fractional CFO for dental works on margins, cash, compensation models, growth or sale prep. Tax questions go to a CPA.
Q&A with Corry Jankowski
Corry started doing bookkeeping for a dental office at 14, and her family owned a company that sold and repaired dental equipment. Her most common question from owners is how to fix payroll, followed by budget questions. She works with single and multi-location practices. Digit Squid does not provide tax advisory or tax preparation.
Do dentists need bookkeepers?
Not every practice needs an outside firm on day one, but once there is payroll, insurance deposits, lab bills and a tax deadline, someone has to reconcile the accounts every month. Tax filing still belongs with a CPA.
What is bookkeeping in dentistry?
It is recording and reconciling the practice’s financial transactions in the accounting ledger, and producing statements you can compare to production and collection reports from practice management software.
What accounting software do dental practices use?
Many practices keep the ledger in QuickBooks Online or Xero and keep clinical and insurance data in practice management software. Deposits and insurance payments should tie out between the two systems.
How do multi-location dental practices keep books?
Common patterns are one entity with location tracking, or separate entities per clinic under a management company. Owners usually need a P&L per location and a consolidated view.
Is a dental accountant the same as a dental bookkeeper?
Not necessarily. “Accountant” often implies tax or CPA work. A dental bookkeeper focuses on the books and monthly close. If you need tax returns, use a CPA.
Does Digit Squid prepare dental tax returns?
No. Digit Squid’s founder states she does not provide tax advisory or tax preparation. Tax work should go to a CPA.
Disclosure
Some professionals on Sam's List pay for visibility or leads. Inclusion and order do not rank professionals. This page is educational directory content. It is not tax, legal, investment or accounting advice.