Monthly Archives: July 2014

Disability Insurance Basics for Dental Practices

Disability Insurance Basics

Most people plan to work in their dental practice until they are old enough to retire. Unfortunately, unexpected accidents, injuries and illnesses can quickly derail this plan and render an individual unable to work and earn a living on his or her own. For this reason, many people invest in disability insurance to protect against financial problems.


A disability insurance policy replaces a portion of the covered person’s income when he or she becomes unable to work because of a covered event, such as an accident or severe illness. Disability insurance may offer short-term and/or long-term coverage. While short-term coverage typically provides benefits for six months or less, long-term coverage provides benefits to workers with disabilities expected to last more than 6 months. Some dental employers provide disability insurance for their employees as a benefit of employment, but workers can also purchase a policy on their own.


Not all disability insurance policies are the same, so careful shopping and consideration is highly recommended. Most disability insurance policies replace at least 60 percent of the covered worker’s gross earnings. However, additional coverage is sometimes available for a higher premium. While some policies can be canceled based on certain factors, such as the worker’s health, others cannot. Not all policies define “disability” in the same way, so subscribers should read all policy information thoroughly before making a final purchase decision.

Disability Insurance versus SSDI

Disability insurance is not the same as Social Security Disability. While disability insurance policies are purchased from private insurance companies, SSDI comes from the federal government and is based on the covered individual’s work and earnings history. Most dental workers have the option of applying for SSDI after becoming disabled, regardless of whether they are receiving benefits from a private disability insurance policy. However, the approval process is lengthy and often difficult.

The 4 Most Common Employee Lawsuits

If you own a small dental practice you cannot ignore the possibility of being sued by an employee at some point in time. In fact, it is a rare business that is not sued by an employee if the dental practice has been operating for more than a few years. The United States is a litigious society in general and employers are frequent targets of a wide variety of lawsuits. Continue reading

18 Accounting Terms You Should Know


It’s back-to-school time. Learning is not just for children. Why not take a page from the kids’ books and do some learning of your own?
QuickBooks is easy to use, intuitive and flexible. But it is not an accounting manual or class or tutorial. If your dental practice is exceptionally uncomplicated, you might get by without knowing a lot about the principles of bookkeeping.

Still, it helps to understand the basics. Here’s a look at some terms and phrases you should understand.

  1. Account. You’ll set up financial accounts like checking and savings in QuickBooks, but in accounting terms, this refers to the accounts in your Chart of Accounts: asset, liability, owners’ equity, income and expense.

    Fig 1 25 Accounting Terms You Should KnowFigure 1: A QuickBooks Chart of Accounts

  2. Accounts Payable (A/P). Everything that you owe to vendors, contractors, consultants, etc. is tracked in this account.

  3. Accounts Receivable (A/R). This account tracks income that hasn’t been realized yet, Accrual Basis. This is one of two basic accounting methods. Using it, you record income as it is invoiced, not when it’s actually received, and you records expenses like bills when you receive them. Using the other method, Cash Basis, you would report income when you receive it and expenses when you pay your practice’s bills.
  4. Asset. What physical items do you own that have value? This could be cash, office equipment and real estate. In QuickBooks you’ll be managing two types. Current Assets are generally used within 12 months (or you could convert them to cash in that length of time). Fixed Assets refers to belongings like vehicles, furniture and land, property that you probably won’t use up in a year and which usually depreciates in value. Depreciation is very complex; you may need our help with that.

  5. Average Cost. This is the inventory costing method that programs like QuickBooks Pro and Premier use to calculate the value of your stock.

    Fig 2 25 Accounting Terms You Should KnowFigure 2: QuickBooks provides a Statement of Cash Flows report.

  6. Cash Flow. This refers to the relationship between incoming and outgoing funds during a specific time period.

  7. Double-Entry Accounting. This is the system that QuickBooks uses � that all legitimate small business accounting software uses. Every transaction must show where the funds came from and where they went. Each has a Credit (decreases asset and expense accounts) and Debit (decreases liability and income accounts) which must balance out (other types of accounts can be affected).

  8. Equity. This refers to your dental practice’s net worth. It’s the difference between your assets and liabilities.

  9. General Journal. QuickBooks handles this in the background, so it’s unlikely you’ll ever be exposed to it. We sometimes have to create General Journal Entries, transactions required for various reasons (errors, depreciation, etc.) that contain debits and credits. Please leave that to us.

  10. Item Receipt. You’ll create these when you receive inventory from a vendor without a Job. QuickBooks often associates customers with multi-part projects that you’ve taken on, like a kitchen remodel.

  11. Net income. This is your revenue minus expenses.

  12. Non-Inventory Part. When you purchase an item but don’t sell it or you buy something and resell it immediately to a customer, this is what it’s called. It’s merchandise that isn’t stored by you for future sales.

  13. Payroll Liabilities Account. QuickBooks tracks federal, state and local withholding taxes, as well as Social Security and Medicare obligations, that you’ve deducted from dental employees’ paychecks and will remit to the appropriate agencies.

    Fig 3 25 Accounting Terms You Should KnowFigure 3: QuickBooks helps you track and remit Payroll Liabilities.

  14. Post. You won’t run into this term in QuickBooks. It simply refers to recording a transaction within one of your accounts.
  15. Reconcile. QuickBooks helps you with this. It’s the process of making sure your records and those of your financial institutions agree.

  16. Sales Receipt. This is how you record a sale when payment is made in full during the Statement. You’ll generally use invoices to bill customers in QuickBooks, but you can also send statements, which contain transaction information for a given date range.

  17. Trial Balance. This standard financial report tells you whether your debits and credits are in balance. Should you run this report and find a problem, let us know right away.

  18. Vendor. With the exception of employees, QuickBooks uses this term to refer to anyone who you pay as a part of your dental business operations.

These are just a few of the terms you should recognize and understand. We hope you’ll contact us when you need help understanding how the accounting process fits into your dental practice’s workflow.