Having a dental or medical practice can be overwhelming. You have to think about your employees, your marketing strategies, and especially your financials – all on top of your patients. If you want to have clarity on where your practice currently is and how it is performing, you should ensure that your accounting books stay organized at all times. With this in mind, here are some of the best ways to keep your accounting up-to-date.
Separate Your Business and Personal Bank Accounts
As a business owner, you should separate your personal money from your business money. Having different accounts will provide clarity on the tax-deductible expenses of your practice. It will ensure that credit card expenses, overdrafts, and checking accounts won’t be included in your accounting books and that no VAT charges, medical billings, or business transactions are omitted.
Create an Accounting System
The moment you open your practice, having an accounting system is essential. Please take note that it doesn’t have to be complicated and sophisticated. In fact, you can even begin with your own manual system, but you should eventually digitize it through spreadsheets, a drive, or even a software system.
If you plan on hiring a business accountant, make sure to be clear what system he or she is most comfortable with. There are even times that some accountants offer their ready-made spreadsheet.
Another effective way to do this is by working with billing and accounting outsourcing companies. They already have a seamless and effective system that works well. Moreover, outsourcing your accounting with these companies also decreases any possible mistakes, thus saving you time and money.
Track Your Expenses Consistently
The foundation of maintaining a dependable and organized business recordkeeping is by tracking your expenses consistently. This step allows you, as the owner, to build your financial statements, easily monitor your business growth, prepare and support your reported tax returns, and keep track of all your deductible expenses.
There are four kinds of receipts that you should always keep in mind:
- Out-of-town Business Travels. The CRA and IRS are aware that some people claim personal activities as a business expense, as well. The good thing with this is that your other receipts can confirm your business activities while you are away. These paper trails make the picture clearer.
- Meals & Entertainment. Conducting your business meetings inside a restaurant or a cafe is acceptable. However, you have to make sure that you document it properly. Here’s a tip: record who attended your gathering and state the objective of the meeting at the back of the receipt.
- Receipts for Gifts. As a business owner, maintaining your relationship with your clients is essential. Hence, there are times that you have to offer gifts to them. In accounting, something can only be considered a business expense if the gift giver does not use the gift alongside the recipient.
- Vehicle-related Expenses. You need to record when, where, and why you company vehicles to make sure that everything is in order.
Keep Your Accounting Up-to-Date with Prospa Billing
Tracking expenses can be overwhelming, especially for medical or dental practices that need to pay most of their attention to patients. If you’re still confused about how the whole accounting system works, it might be better for you to outsource this service. Prospa Billing specializes in claims submission, payment posting, patient statements, denial management, and aging A/R analysis. With us, you will be able to focus on patient care, while not having to worry about streamlining your finances.
To make an appointment, contact us at (844) 663-3686 or arrange a free consultation through our online form.