Quick answer: Good dental bookkeeping records collections, not production, as revenue, matches insurance and patient deposits to practice management reports, and uses a dental chart of accounts for supplies, lab fees and payroll by role. Reconcile and close the books every month so you can compare costs to benchmarks.
Dental practices have more moving parts than most small businesses: insurance payments, patient balances, lab bills, supplies and a payroll that is often the largest expense. Good dental bookkeeping turns all of that into numbers you can trust and act on.
Why dental books are different
- Production is not income. What you bill and what you collect are two different numbers, and only collections belong in your books as revenue
- Payments come from many sources. Insurance carriers, patients, financing companies and card processors all deposit on different schedules
- Costs are specific. Dental supplies, lab fees and hygiene payroll each need their own categories to compare against benchmarks
7 best practices for dental practice books
- Record collections, not production. Book revenue from actual deposits so your profit and loss matches reality
- Match deposits to your daily reports. Compare deposits from your practice management software to the bank so missing or duplicated payments are caught early
- Use a dental chart of accounts. Separate dental supplies, lab fees, associate and hygiene pay, front office pay, rent and marketing
- Separate insurance and patient payments. It shows how your payer mix is changing over time
- Track refunds and credit balances. Overpayments that sit unresolved become a compliance and cash problem
- Keep owner pay clean. Record owner salary, draws and distributions correctly, especially if the practice is an S corp
- Close the books every month. Reconcile every account before reviewing results
Your monthly checklist
- Reconcile every bank and credit card account
- Match insurance and patient deposits to your practice management reports
- Record lab bills and supply invoices in their own categories
- Record payroll by role: dentists, hygienists, assistants and front office
- Review accounts receivable aging and follow up on balances over 90 days
- Clear refunds and patient credit balances
- Review the profit and loss as a percentage of collections
- Set aside estimated taxes for the owners
- Lock the month in QuickBooks Online
Tip: Review each expense category as a percentage of collections, not production. Our guide to dental practice KPIs and overhead benchmarks shows the ranges to compare against.
Common mistakes to avoid
- Recording production as income and overstating profit
- Lumping lab fees and dental supplies together
- Paying personal expenses from the practice account
- Letting insurance deposits go unmatched for months
- Skipping reconciliations until tax time
Dental bookkeeping FAQs
Should a dental practice use cash or accrual accounting?
Most small practices use the cash method for taxes, recording income when it is collected. Your practice management software still tracks production and receivables, so you get both views.
How do I record insurance write offs in my books?
Insurance adjustments are not expenses in your books. They reduce production in your practice management software, and only the amount actually collected is recorded as revenue.
How should I record credit card processing fees?
Record the full payment as revenue and the processor fee as a separate expense. Recording only the net deposit hides what you pay in fees and makes deposits harder to match.
What accounting software do dental practices use?
Many practices use QuickBooks Online for the books alongside practice management software such as Dentrix, Eaglesoft or Open Dental. The two should be reconciled every month.
How often should a dental practice reconcile its accounts?
Every month. Monthly reconciliation catches missing insurance payments, duplicate deposits and errors while they are still easy to fix.
Help from a team that knows dental practices
We handle dental practice accounting for single dentist offices and growing group practices across Northern Virginia, DC and Maryland, all remotely from our Ashburn office.
This article is general information and not tax advice for your situation. Tax rules change, so talk with a qualified professional before making decisions.
