Essential Tips for Orthodontist Practice Bookkeeping

Do you ever find yourself combing through invoices and patient records or frantically calling insurance companies, and wish you had more time in your schedule to focus on making your patients smile? In this article, you’ll get practical tips for orthodontic practice bookkeeping that’ll help you free up more time to devote to growing your business. We’ll offer tips on analyzing transactions, efficiently managing patient payments, and identifying which key financial statements to review. Let’s get that bookkeeping all sorted because you deserve to smile, too!

‍

Four Essential Tips for Orthodontist Practice Bookkeeping

‍

The key to stress-free bookkeeping is to maintain organized financial records and patient accounts while also conducting timely financial audits. Let’s go over four main strategies to help you stay on top of your bookkeeping.

‍

1. Categorize Transactions Correctly

‍

First, take measures to ensure you’re able to accurately identify all revenue streams and expenses that apply to your practice. Here’s how to categorize your transactions accurately:

‍

• Create a chart of accounts: Assigning codes to all your services, treatments, and expenses will reduce confusion and help you identify your most profitable offerings or areas where you’re overspending. Be consistent with your numbering system throughout and don’t hesitate to sub-categorize if that helps add more clarity to your records.
• Include detailed descriptions of your treatment plans: This step ensures you know how each service is contributing to your total patient income. Include all related fees, discounts, and insurance coverages.
• Know your tax write-offs: Another reason you should categorize your transactions is because it will help you identify where your practice can obtain substantial tax deductions. In turn, knowing which expenses can be deducted from your tax liability will also help you categorize your expenses more accurately. Examples of eligible deductions for orthodontists include equipment purchases, office supplies, and continuing education.

‍

2. Get Organized About Patient Accounts

‍

Between tracking payments, ensuring accurate documentation, and handling insurance claims, managing patient records and invoices can get overwhelming. Here’s how to manage patient accounts efficiently so you don't lose track of overdue payments.:

‍

• Establish clear payment terms and billing procedures: Ensure that your patients and staff understand your payment terms and options, as well as your insurance claim and bill dispute procedures. Keep your financial policy updated and post it on your website and any other channels where it might be relevant.
• Simplify your insurance verification and claim process: Before a patient enters your clinic, confirm their insurance provider and coverage plan. Submit claims and resolve disputes immediately to ensure insurance companies pay you on time.
• Communicate unpaid balances to your patients: While it also helps to send weekly statements to remind patients of unpaid balances, phone calls tend to work best because they establish a personal connection. Inform your patients beforehand by email or text message that you’ll be calling them about an unpaid payment.
• Automate your invoice and billing systems: As your client base grows, consider investing in bookkeeping software or hiring a bookkeeping service to keep track of all client payments. There are available tools that capture payments in real time, have built-in bill and invoice payment matching features, and can flag aging invoices.

‍

3. Conduct Accurate Financial Reports and Reviews

‍

There are three financial statements that you should regularly generate and review. Knowing how to generate and read these statements can help you make informed decisions for long-term sustainability and growth.

‍

• The Income Statement (also known as the Profit and Loss Statement) summarizes your revenue and expenses within a timeframe.
• The Balance Sheet lists all your assets and liabilities within a specific period.
• The Cash Flow Statement tracks all your cash inflows and outflows, including operating, investing, and financing activities.

‍

These documents are important to understanding the expenses affecting your revenue. They also verify that you have sufficient liquidity to pay your immediate bills and fund daily operations. You’ll also find out if your liabilities (such as loans) are higher than your assets.

‍

If you have an accountant, you can schedule a quarterly or even monthly review of your statements so you’re not caught off guard by unexpected expenses. Using a bookkeeping software is another way to ensure that your numbers are always accurate.

‍

4. Hire Professional Bookkeeping Help

‍

Seeking the help of experts to optimize your bookkeeping can enable business growth by freeing up more time for you to spend with clients. Professional accounting and bookkeeping services can handle everything for you一from capturing payments to reconciling records and generating reports in real time. Be sure to interview potential providers to check that they have experience with orthodontic businesses.

‍

Here are the major benefits of outsourcing your bookkeeping to a service provider:

‍

• Updated expertise on current technologies, regulations, and certifications
• Freedom to start or cancel their services at any time, which can help you save on long-term labor costs
• Access to related services, such as tax planning and expense management
• Business analysis consultations with tailored solutions that target your specific pain points
• Assurance that your financial records are updated, accurate, and legally compliant

‍

Streamline Orthodontic Practice Bookkeeping With Decimal

‍

Unpaid invoices and disorganized financial reports can be overwhelming, but there are tools that can help. Decimal’s comprehensive solutions automate not only accounting and bookkeeping, but also tax preparation, expense management, and invoicing. With Decimal, you don’t have to worry about missing invoices and receipts or inaccurate financial reports.

If you’re interested in getting help that’ll take the stress out of bookkeeping, schedule a meeting with us today.