As a dentist, when it comes to performing a teeth check-up or spotting a cavity, you do your job spot-on with finesse. However, bookkeeping is different from your usual work and you may lack skills for doing bookkeeping effectively.

So, what are the common bookkeeping mistakes that are usually made by dentist?

1. Failing to understand cash flow and profit

Being in a dental profession, you may not understand the financial reports. As a result, you fail to differentiate cash flow and profit and make the mistake of purchasing with profits which do not represent cash.

So, what actually is the difference between cashflow and profit? Well, cashflow is the money that is moving in and out of the business in a month. And, profit is the financial gain which is the difference between the revenue and expenses for a certain period of time.

While cashflow is determined after finishing cash flow equation and factoring in accounts receivable, inventory, and depreciation expenses, profit is calculated right after completion of profit and loss statement.

2. Not using accounting software

Using accounting software like Quickbooks will help you to record and save your valuable financial information. Moreover, the accuracy and security that this software provides can help to make sound financial decisions and you can continue doing what you are best at. So, you should not make the mistake of not using such type of software.

3. Not working with an experienced dental accountant

You will have little to no experience in dealing with your dental tax or accounting issues. So, when you hire dental accountant specialising in dental bookkeeping, you can be confident in the work they do and trust on the accuracy of the results. Hence, your financial statements will be prepared according to the dental industry standards leaving your financial conditions of your practice in place and you will easily be able to focus on your job.

If you do not consider hiring a professional in hope to save some money, you will be making a huge mistake which will incur you more damage in the future.

These bookkeeping mistakes can be very costly and can cause an impact on your finance. This is why you should make sure not to make them again.