Veros Dental

We recently ran this article in our newsletter and wanted to share it on our blog as well…

QuickBooks is a great software package for your dental practice accounting.  It’s easy to use, has great reporting tools, and the functionality is all-inclusive for what your practice needs (the desktop version, not the online version).  However, the default Chart of Accounts, which most businesses use with little customization, leaves quite a bit to be desired.  With some dragging, dropping, and editing though, you can create a Chart of Accounts that will result in a much more concise, legible, and easy-to-use Profit & Loss Statement that you can use to better manage your practice.

The default Chart of Accounts in QuickBooks typically includes about 25-30 expense accounts.  Most of these accounts are meaningful and useful.  However, to look at a Profit & Loss Statement with 30 expense accounts can be a little overwhelming and forces you to analyze it in some level of detail, even if it is a high level look you want.  In addition, it’s difficult to compare your practice expense results to peers and surveys when the expenses are so detailed.  On the other hand, it is important to know how much is spent on each line item such as utilities, office supplies, uniforms, and marketing.

The Chart of Accounts can be customized to provide the best of both worlds through the use of subaccounts.  In QuickBooks, your Profit & Loss Statement (see sample above right) can be generated showing only the top level accounts (collapsed) or with all the subaccount details (expanded).  By setting up your Chart of Accounts using subaccounts, you will have access to a Profit & Loss Statement easily comparable to peers and surveys, and easier to read by YOU!  In addition, you’ll have the details you need in an expanded Profit & Loss Statement to examine the individual line items.

The main expense accounts we recommend are Lab Fees, Dental Supplies, Payroll (not included dentist pay), Marketing/Advertising, Rent, and General Overhead.  These are all setup as the main expense type accounts.  In addition, we recommend that accounts such as Dentist Compensation, Interest Expense, Depreciation Expense, and Owner Perks all be set up as separate other expense type accounts.  By setting these up as other expense type accounts, they are excluded from your net operating income, making the Profit & Loss Statement to this point a very comparable report.

If you have questions on how to organize your Chart of Accounts, contact Adam or Lauren at 317-452-4580 or send us an email at info@verosdental.com.