Onlyfordentists
Why You Need a Dental CPA
Just as a neurosurgeon specializes in brain or spine surgery, a dental CPA specializes in performing accounting and advising tasks for dental practices. Having a specialist on your team can be beneficial in many ways. Here, Only for Dentists explains why enlisting the expertise of a specialized dental CPA is so vital to the success of your dental care business.
A Dental CPA Will Understand Dental Terminology
Dentists must regularly purchase new equipment in order for their practice to remain top-of-the-line and successful. A CPA who specializes in dental practitioners will have a working knowledge of this equipment, and whether it will be a wise investment for this point in the business’ lifetime. General-practice CPAs will have to spend critical time familiarizing themselves with the terminology of dentistry.
A Dental CPA Will Be Able to Discuss Dentistry Trends
A dental CPA has specialized knowledge which allows them to understand overarching trends in the dental industry at large. They will be able to pick out specific opportunities and points of concern that you, as a dentist, should focus on more closely. This will help you better plan for the future, and avoid major hassles looming in the distance.
A Dental CPA Allows You to Focus on Your Practice
As a dentist, providing great service to your clients should be your number one priority. It can be stressful to dedicate your focus to multiple facets of your business. Enlisting the help of a dental CPA; however, allows you to channel your focus on your business, and leave the financials and tax preparation to someone who is qualified to handle it efficiently and easily.
A Dental CPA Will Help You Create or Re-Evaluate Your Retirement Plan
Your dental CPA understands retirement plans, and can help to create or re-design your retirement plan, as well as the plans in place for other employees. Because choosing a successful retirement plan will differ based on an individual’s needs, as well as the demographics of the firm, your dental CPA will be able to hand-tailor a plan to perfectly match your unique business.
A Dental CPA Can Connect You with Loan Providers Who are Familiar with the Dental Industry
If you are preparing to buy or build an office, a dental CPA will be able to put you in contact with loan officers and providers who specialize in providing loans to those within the dental industry. This can greatly streamline the process, ensuring your needs are met quickly and efficiently.
A Dental CPA is a Specialist—Just Like You
As a dentist, you know how vital it is to specialize in the task at hand—you wouldn’t trust your hairstylist to fill a cavity, right? When hiring a CPA, the reasoning should be the same. A dental CPA has the specialized knowledge to successfully perform all the accounting, tax preparation and financial advisory procedures necessary to ensure your dental firm runs smoothly and grows successfully. The specialists at Only for Dentists are excited to begin working with you—contact us today for more information about how we can help!
Top Dental Bookkeeping Mistakes
Dental practices can cost themselves hundreds or even thousands of dollars by making relatively simple accounting mistakes. Here, the CPA and accounting professionals at Only for Dentists detail the top dental bookkeeping mistakes.
Recording Transactions in a Previous Period
Dental practices should “close their books” at the end of every month, which includes reconciling all of the various accounts and preparing financial statements. Closing the books on a monthly basis helps practices catch major mistakes—such as transactions being recorded in the wrong month—which can lead to discrepancies between balance adjustments and financial reports. These discrepancies can cause a myriad of problems, and could even incur penalties from the IRS. Closing the books each month is an easy fix to a potentially destructive problem.
Forgoing an Industry Standard Chart of Account
The chart of account is an accounting tool that lists each type of item for which money or credit is spent or received. For dental firms, this will include a list of clients, insurance companies, office expenses, payroll and more, all with their corresponding expenditures or payments received. While standard charts of accounts exist, one developed specifically for the dental industry can help dental firms better manage their accounts, streamline expenses and determine how to better increase profits.
Confusing Cash Flow with Profit
A dental firm’s profit and cash flow are two separate and unique entities, and understanding what each entail is critical to dental accounting success. Profit is determined by subtracting total expenses from total revenue. An indication of profit is not an indication that there is necessarily cash available for large purchases: the cash flow statement will determine this. Cash flow is the amount of money coming into and out of a dental practice’s bank account every month, and is measured by the cash flow equation, which factors in accounts receivable, inventory and depreciation expenses.
Failing to Properly Classify Personal Expenses and Distributions
Dental practitioners who work for their own firm will either take a salary or regular distributions, depending on the structure of their practice. If a practitioner takes cash distributions, they should not be listed under expenses for the firm, as they are neither salary nor payroll. Failing to properly classify distributions can lead to a firm underpaying their taxes. Furthermore, it is important to understand that personal expenses, such as individual estimated taxes, personal food and drink, entertainment or similar expenses are not tax-deductible, and should also be recorded as distributions.
Choosing a General Practice Accountant
Dentists are specialized practitioners with specific needs, so why shouldn’t their CPAs specialize in the unique needs of dental professionals? As our name implies, Only for Dentists is dedicated solely to helping dental practitioners and their firms with their accounting needs. This helps prevent costly mistakes, allows dental firms to maximize profits and ensures practitioners receive the specialized assistance they need, whether during tax time or year-round. For more information, contact Only for Dentists today!
Here are the Documents You Need When Deducting Business Expenses
Most ordinary and necessary business expenses are deductible as long as you have the proper documentation. If your return is audited, the IRS may require that you show the type of item purchased and that payment was made. Here are some examples of acceptable documentation.
Checks. A canceled check can be used as proof of payment if it has the name of the payee and shows the cancellation on the back. The IRS also accepts highly legible images of checks if you don’t have your checks returned.
Credit/debit card transactions. You must have an account statement that shows the amount of the charge, the transaction date, and the name of the payee.
Electronic funds transfers. The IRS requires an account statement that shows the amount of the transfer, the date the transfer was posted to the account by the financial institution, and the name of the payee.
Invoices. You must have an invoice or some other form of documentation showing what you purchased. Canceled checks, credit/debit card statements, and records of electronic funds transfers only provide proof of payment.
Cash register receipts. If you receive a receipt with no details of the items purchased, write a description of the items on the slip. As long as the purchase is for a relatively small amount, the IRS should accept it.
If it’s not self-explanatory, make sure you write the business reason for your purchase on the invoice or receipt so you’ll be prepared for any questions from the IRS. And be aware that there are separate substantiation rules for travel, entertainment, and auto expenses.
Whether you need individual or business tax advice, give us a call. We’ve got the answers you’re looking for, so don’t wait. Call us today.
Can You Deduct Your Vacation
How would you like Uncle Sam to pay for part of your vacation? Sound unlikely? If you combine your vacation with a business trip, you may be able to deduct some of your expenses. Pay attention to the rules, though. Expenses must meet certain requirements before they’re tax deductible.
General Guidelines
As long as your primary reason for making the trip is business, you generally can deduct the cost of your transportation to and from your destination. You’ll generally be able to deduct food (within limits) and lodging costs only for the days you actually spend on business.
Bring the Family
You can bring your family along, too. While you can’t deduct their food, lodging, or airfare, you can write off your own expenses, including the single-occupancy rate for lodging on days when you’re conducting business. If you and your family travel by car, you can also deduct the full cost of transportation. Just be sure to keep detailed records.
Why You Need An Annual Business Review
In addition to providing for you and your family, your small business is a part of this country’s job creation engine. Small businesses make up 99.7% of U.S. employer firms and account for 63% of net new private sector jobs.* Conducting an annual review of your business finances can help keep your business healthy and growing.
Management
No doubt you are pivotal to your company’s success. But at some point, it’s important to focus on bringing up the next level of management, especially if you would like to sell your business or pass it to family members in the future. While mentoring the key individuals who can effectively run the business, don’t forget about key person insurance for them. It’s designed to protect your business if you, a partner or another key employee were to die prematurely.
Plan ahead
What would happen to your business if you or one of your key employees could no longer work? Unless you’ve planned ahead, the company’s continued success, continuity of management and the future of all the families your business supports could be jeopardized. Would the absent worker’s family — which could be yours — be fairly compensated for their interest in the business if that interest needed to be sold?
A buy-sell agreement combined with key person insurance can help relieve concerns you may have. Work with your financial professional and attorney to make sure the agreement is drafted properly to address your and your business’s needs.
Risks
Do you have appropriate processes and procedures in place to handle human resources and compliance issues, such as the new health care coverage rules under the federal health reform law? When was the last time you reviewed your business’s insurance coverage with your financial professional? You may discover that your business does not have all the coverage it needs in this litigious climate. Ask about umbrella and general liability insurance.
Don’t get left behind. Contact us today to discover how we can help you keep your business on the right track. Don’t wait, give us a call today.
Do You Have a Business Continuity Plan? You Should
What if disaster strikes your business? An estimated 25% of businesses don’t reopen after a major disaster strikes.* Having a business continuity plan can help improve your odds of recovering.
The basic plan
The strategy behind a business continuity (or disaster recovery) plan is straightforward: Identify the various risks that could disrupt your business, look at how each operation could be affected and identify appropriate recovery actions.
Make sure you have a list of employees ready with phone numbers, e-mail addresses and emergency family contacts for communication purposes. If any of your employees can work from home, include that information in your personnel list. You’ll need a similar list of customers, suppliers and other vendors. Social networking tools may be especially helpful for keeping in touch during and after a disaster.
Risk protection
Having the proper insurance is key to protecting your business — at all times. In addition to property and casualty insurance, most small businesses carry disability, key-person life insurance and business interruption insurance. And make sure your buy-sell agreement is up to date, including the life insurance policies that fund it. Meet with your financial professional for a complete review.
Maintaining operations
If your building has to be evacuated, you’ll need an alternative site. Talk with other business owners in your vicinity about locating and equipping a facility that can be shared in case of an emergency. You may be able to limit physical damage by taking some preemptive steps (e.g., having a generator and a pump on hand).
Protecting data
A disaster could damage or destroy your computer equipment and wipe out your data, so take precautions. Invest in surge protectors and arrange for secure storage by transmitting data to a remote server or backing up daily to storage media that can be kept off site.
Protecting your business
If you think your business is too small to need a plan or that it will take too long to create one, just think about how much you stand to lose by not having one. Meet with your financial professional for a full review.
For more tips on how to keep business best practices front and center for your company, give us a call today. We can’t wait to hear from you.
Dental Practice Tips: Find and Keep the Best Talent For Your Business
Finding the best candidate to hire is often costly and time consuming. But, if your new hire turns into a loyal, hardworking, long-term employee, your investment may be worth every cent and minute.
Locate Candidates
How do you find good people? In the past, people who were job hunting would look in the “help wanted” section of the newspaper or go from store to store filling out applications. Today, most people use a computer and a mouse and search the Internet for jobs. So if you’re not posting your openings on online job boards and industry blogs and websites, you may be missing talented candidates. Note: Running classified ads may still be a good way to reach out (especially to fill jobs requiring local candidates) since many local newspapers also have an online job board for posting classifieds.
Another way to attract candidates is to add a recruiting page to your website. In addition to posting job openings, you can use the page to attract qualified candidates by highlighting the benefits of working for your company.
And last, but certainly not least, you can use social media to announce openings and solicit job applicants. There’s no better way to reach a large number of people almost instantaneously.
Make an Attractive Offer
If you’re hoping to hire top talent, you’ll want to make sure the benefits you offer are competitive — or better. According to government analysis of private industry data, 86% of full-time workers had access to employer-provided medical care and 76% had access to a retirement plan.*
Keep Employees on Board
Once you’ve assembled a group of valuable employees, an attractive and competitive benefit package will help ensure they stay. Your financial professional can provide insights and help you review your firm’s benefit package for cost efficiency and competitiveness.
For more tips on how to keep business best practices front and center for your company, give us a call today. We can’t wait to hear from you.
The Good and Bad of Charging Late Fees
Do you struggle with getting your customers to pay their bills on time? Charging late fees might be helpful, but there are pros and cons to this approach.
On the plus side, late fees:
> May serve as an incentive for customers to pay bills by their due dates
> Are a source of additional cash if and when you receive them
On the downside, late fees:
> May not achieve the desired result of on-time payment
> Could alienate customers who sometimes pay late but are otherwise good to do business with
If you decide you will impose late fees, make sure your customers know about your policy up front. You should include the policy in customer contracts and on the face of your invoices. And be sure the amount you charge complies with any restrictions your state may have.
Don’t get left behind. Contact us today to discover how we can help you keep your business on the right track. Don’t wait, give us a call today.
Reviewing Last Year’s Business Records Gives You an Idea of What Worked and What Didn’t
Busy is good. Most small business owners would rather things were too hectic than too slow. As the year winds down, though, let your staff handle the busy-ness while you look at the business — where you are, what you’ve accomplished in past year and where you’re headed in the new year and beyond.
Your bottom line
The quickest way to figure out where you are is to check your bottom line. Are you making money? Are profits better or worse than they were last year at this time? Are you meeting your expectations? If not, why not?
Your business plan
Change is inevitable. And businesses have a way of outgrowing their business plans. But if you don’t have a current plan, you don’t have a way of measuring your progress. So if you’ve been “off road” without a plan for a while, it’s time to formalize a plan that reflects past growth and sets new goals for the next several years.
Your competition
The more you know about your competition, the better. Who are they? How are they different? How are they the same? Where do you overlap each other? Understanding their business model will help you prepare strategically for possible changes in the marketplace.
Your secret weapon
Your work force is your secret weapon, especially if you’re in a competitive market. Dedicated, well-trained employees providing top-notch customer service can help put you out front of even the largest competitor. A rich, competitive benefits package will help you attract — and retain — a high-caliber work force. Health insurance and retirement plans are highly valued benefits. You can offer a variety of other benefits to suit your employees’ needs and your budget. Ask your financial professional for information.
Your future
Do you have a formal succession plan? Are you grooming someone to take over? A well-trained successor could help in the successful — and profitable — transfer of your business. And you can use life insurance to prefund all or part of the sale.
Don’t get left behind. Contact us today to discover how we can help you keep your business on the right track. Don’t wait, give us a call today.
Why You Must File and Pay Your Employee’s Withholdings on Time
There is zero wiggle room when it comes to handling the federal income taxes and FICA taxes withheld from employees’ paychecks. The taxes are government property, which employers hold “in trust” and then remit to the IRS on a set schedule. Employers are not permitted to use this “trust fund” money for other purposes.
Serious Penalty
The penalty for breaking the rules is harsh. Any person involved in collecting, accounting for, or paying the trust fund taxes — a “responsible person” — who willfully fails to do so may be liable for a penalty equal to 100% of the unpaid taxes. The penalty is aggressively enforced.
Responsible Persons
Generally, a responsible person is anyone with the power to see that the taxes are paid. This might include a corporation’s officers, directors, and shareholders; employees; and the partners in a partnership. Under certain circumstances, even family members and professional advisors may be subject to the penalty.
It’s not uncommon for there to be more than one responsible person. When that’s the case, each responsible person could be found liable for the full penalty.
A Word About Willful
Failure to pay trust fund taxes can be willful without being an intentional attempt to evade paying the taxes. Temporarily “borrowing” from the trust fund to meet bona fide business expenses in a pinch can qualify as being willful.
Follow Us!