Ask a dental practice owner on the South Shore where the money goes, and supplies and lab fees are usually near the top of the answer. They are large, they change month to month, and in many practice books they are lumped together in a way that makes them impossible to read.
Liliane Larsen has kept the books for private practices since 2006, including dental offices. Here is how we set up the books so these costs make sense.
Start with the chart of accounts
Every practice we work with starts with a chart of accounts suited to its type of practice. For a dental office, that means separating the costs that behave differently:
- Clinical supplies, such as consumables used chairside.
- Lab fees, for crowns, bridges, aligners, and other outside lab work.
- Office supplies, kept apart from clinical costs.
- Equipment purchases, recorded as assets, not expenses.
- Equipment financing and leases, recorded as liabilities, with interest separated from principal.
- Repairs and maintenance, distinct from new equipment.
When these are separated, a single glance at the profit and loss tells you more than an hour of digging through a combined “supplies” line.
Track costs against your own history
Once the categories are clean, the most useful thing you can do is watch them over time. Supply and lab costs measured as a share of the practice’s income, month over month and year over year, show you trends you would otherwise miss:
- A lab fee line that jumps after a change in lab or case mix.
- Supply costs that creep up with no change in patient volume.
- A month with unusually high costs that turns out to be a duplicate bill.
This is about your practice’s own numbers and history, so the comparisons are meaningful for your practice.
Equipment: purchase or financing?
This is one of the most commonly misrecorded areas in practice books. A new piece of equipment financed over five years is not a five-year expense on the profit and loss. The purchase becomes an asset, the loan becomes a liability, and each payment is split between interest and principal.
When this is done wrong, the practice’s profit looks lower than it is in some months and higher in others, and the balance sheet does not match the lender’s statements. Your CPA will also need it right for year-end.
Bills paid twice
Dental practices receive a steady stream of bills from suppliers and labs, often by both mail and email. That is exactly how bills end up paid twice. When we start with a new practice, Liliane’s first review usually looks for:
- Bills paid twice, or for more than they should have been.
- Bills that were forgotten.
- No clear list of what is owed, and when.
When bill management is part of the engagement, we receive and review bills, catch duplicates, and prepare payments for your approval, with a weekly report of what was paid.
Associates and owner compensation
Practices with associate dentists need compensation recorded clearly, so the owners can see what each provider costs. Where your records support it, we can also report income by provider. Payroll stays with your payroll provider; we post it to the books and review it.
What you receive each month
- A profit and loss, a balance sheet, and a cash analysis, on an agreed schedule.
- A review conversation with Liliane and your account manager.
- Books ready for your CPA at year-end.
Frequently asked questions
Yes. Our practice clients are in Massachusetts, and we welcome inquiries from further afield. All of our work is done online.
No. Your billing team or company keeps that work. We check that recorded income matches deposits reaching the bank.
Not at all. We scope cleanup separately, as the first step of ongoing monthly bookkeeping.
Start with a conversation
If you own or manage a dental practice in Hingham, Hanover, Norwell, Marshfield, Duxbury, or elsewhere in Massachusetts, request a free consultation. Prefer to call? 781-924-1489.