QuickBooks is a user-friendly software that many dentists use to maintain their practice books. Not only is it user friendly, but it also has many useful tools and benefits for a small business owner.
As a small business owner, you should always be aware of your practice’s financial health. This can be measured by having a good handle on:
- Overall debt
- Cash balance
- Monthly, quarterly and annual practice collections (income) and expenses
- Profit before and after you consider the owner’s compensation and discretionary costs
- Reviewing your expenses based on a percentage of collections (income) – easily compared to industry averages once you have this data
There is an option within QuickBooks where you can establish and implement an income and expense budget for your practice. This will help as you are setting your goals for the upcoming year.
QuickBooks is used to manage your business checking account, savings account, credit card activity and much more.
Once all activity is entered into QuickBooks, you can reconcile your bank accounts, merchant service activity, credit card activity and loan activity with the corresponding statements. This is when you can catch errors or ‘missed’ items which cleared the bank that you have not captured in your accounting software. Or you may see a double charge or deposit that was entered incorrectly.
QuickBooks is a very user-friendly program, as I mentioned above, and it helps you stay on top of the ongoing financial activity of your practice. Your CPA can also get you various reports needed to prepare financial statements, tax returns, projections and other financial analysis in a matter of minutes (as long as your books are up to date!).
There are many aspects of the software that can be utilized to help monitor and measure your practice’s financial status. Take the time to familiarize yourself with QuickBooks to help you stay on top of your practice!