Bookkeeping and Accounting for Dental Practices: What's the Difference?
Running a successful dental practice is certainly not something that comes easy. For many, it means a great deal of risk, as well as trial and error when making decisions that best suit the health of the business. One of the biggest misconceptions that practice managers and dental accountants alike tend to make is thinking that bookkeeping and accounting processes are the same. In reality, there are distinct differences between the two that must be understood in order to get the most out of both.
So, what’s the difference between bookkeeping and accounting for dental practices? Here are just a handful of things you need to know, all of which can point you in the direction of a solution that will work well for your business.
The Purpose of Bookkeeping
Bookkeeping is one of the most important things that business owners can implement to ensure they’re spending their money appropriately. A good bookkeeper is worth their weight in gold, as the services they provide are unique to their role. In essence, bookkeepers track recorded transactions on a daily basis and analyze to ensure errors and inaccuracies never become a part of the equation.
Common bookkeeping tasks include:
- Transactional recording
- Posting Credits/Debits
- Maintaining/Balancing Ledgers
Every bookkeeper has his or her own approach and methodology, and how complex the job is for a small practice may be a completely different story from that of a larger business. A good bookkeeper will be able to not only ensure everything lines up, but glean insights from the data that can help support a better future for the practice.
The Purpose of Accounting
Clearly, it’s important for practice managers to ensure they have an experienced bookkeeper on their side, but what about accounting? While bookkeeping tends to be “by the books” and transactional in nature, accounting is more subjective in that it involves developing high-level strategies for improving the business’s financial future. Accounting typically involves the following processes:
- Preparation of Financial Statements
- Analysis of Operational Costs
- Preparation of Tax Returns
- Consulting on Financial Decisions
The job of an accountant to not only forecast financial needs and milestones, but also to advise the business in financial best practices—especially when it comes to taxes and business expenses.
Which Does My Practice Need?
For practice managers that are hoping to get the utmost in control over their business financials, there’s simply no better option than to hire both a bookkeeper and an accountant that can work together on tackling any challenges that might come down the pike. The added costs are not only business expenses, but also a fraction of what you stand to save by having the help of a strong financial team on your side.
So don’t just assume you can get by with either an accountant or a bookkeeper to manage the entirety of your practice’s finances. By working with both, you’ll be doing what’s necessary to keep the future of your practice bright and full of forward progress.