“How to sell a dental practice” has become one of the fastest-rising dental searches in Massachusetts. Some owners are planning retirement. Others are weighing an offer, bringing in a partner, or simply wondering what their practice might be worth someday.
A sale involves brokers, attorneys, your CPA, and often a lender on the buyer’s side. But almost every conversation in that process starts in the same place: your books. Here is why, and what to get in order first.
Why the books matter so much
A buyer, and the buyer’s lender, will study your financial statements closely. They want to know what the practice earns, what it costs to run, and what the owner takes home. When the books are clean and consistent, those questions have clear answers. When they are not, every unclear number becomes a question, a delay, or a reason to negotiate.
Your broker and CPA will guide valuation and deal structure. Our job, and the part you can start on now, is making sure the numbers they work from are right.
What to get in order, ideally one to three years ahead
1. Reconciled books for every year in question
Every bank account, credit card, loan, and line of credit reconciled to its statements. Buyers typically look at several years of history, so earlier years matter too.
2. A consistent chart of accounts
If supplies and lab fees were combined one year and split the next, year-over-year comparisons fall apart. A chart of accounts suited to a dental practice, used consistently, makes trends easy to see.
3. Owner compensation clearly recorded
Salaries, draws, distributions, and any personal expenses run through the practice should be clear and easy to identify. Buyers and their advisors often adjust for owner-specific costs, and they can only do that when those costs are visible.
4. Equipment and financing recorded correctly
Equipment should be recorded as assets, and loans and leases as liabilities, with balances that match lender statements. Buyers will want to know what equipment comes with the practice and what is still owed on it.
5. The building kept separate
If you own the building in a separate entity, its books should be kept separately, with rent recorded consistently between the two. The practice and the property may be sold together or separately, and clean books for each make either path simpler.
6. Books that agree with your tax returns
Your profit and loss and your filed returns should tell a consistent story. Where they differ, work out why with your CPA well before a buyer asks.
7. Clean accounts payable
No forgotten bills, no duplicate payments, and a clear list of what is owed and when. It is one of the first things Liliane Larsen’s review looks at in any practice.
Getting ready to sell
Tick each one once it is in order.
0 of 7 in order
What not to wait for
Many owners plan to tidy up the books “when the time comes.” But cleanup across several years takes time, and the period right before a sale is the worst moment to discover a loan recorded wrong or an account that has not reconciled in years. Starting early gives you options.
How Larsen Bookkeeping helps dental practices
Liliane Larsen has kept the books for private practices since 2006. For dental practices, that means:
- A chart of accounts suited to the practice, and books kept current in QuickBooks Online.
- Every account reconciled monthly, with payroll from your provider posted and reviewed.
- A profit and loss, a balance sheet, and a cash analysis on an agreed schedule, plus a review conversation.
- Coordination with your CPA at year-end and whenever they need clarification.
If the books need work first, we scope a cleanup separately, as the first step of ongoing monthly bookkeeping. It goes back as far as necessary.
Frequently asked questions
No. Valuation is work for your broker, CPA, or a valuation professional. We make sure the books they rely on are accurate.
Our work is keeping the books for practices. If you are buying a practice in Massachusetts, we can talk about keeping its books after the purchase.
The earlier the better. One to three years ahead gives you clean, consistent history to show buyers.
Start with a conversation
If you own a dental practice in Hingham, Hanover, Norwell, Duxbury, Plymouth, or anywhere in Massachusetts and a sale is on your horizon, request a free consultation. It is a short conversation about your practice, your books, and whether we are a good fit. Prefer to call? 781-924-1489.
This article is general education, not tax, legal, or valuation advice.