dental cpas

Can I Use Email for Communicating with My Dental Accountant?

In the electronic age, it’s easier for many small dental practice owners to conduct business through electronic means of communication, email in particular. While it may be tempting to conduct as much of your business through email as possible, there are inherent risks in doing so.

The biggest risk is significant. That is, the risk that your private, personal and financial information could fall into the wrong hands. If you’re using an accountant for your family taxes, for example, email makes personally identifying information not only about yourself and your spouse vulnerable, but your children too.

What Kind of Information is Available?

  • Social Security Numbers
  • Addresses
  • Dates of Birth
  • Banking Information
  • And more

This information is highly valuable to hackers and identity thieves who will pay premium prices to get their hands on it. They’re not afraid to break a few laws to get that information either.

How Can You Enjoy the Convenience of Email without the Risks?

The Gramm-Leach-Bliley (GLB) Act, protects the non-public personal information (NPI) of consumers. The act provides the Federal Trade Commission with the responsibility of implementing the law. Under that authority, the FTC has created the following rules.

  • Safeguards Rule - As an important rule, it requires the secure transmission, receipt and storage of data containing any NPI at all times that includes passwords, encryption and physical protection. The email platform used should have 256-bit encryption. A 256-bit encryption is more powerful than a 126-bit encryption to protect sensitive information and files communicated through email. Further protection should be afforded in the form of a written information security plan.
  • Privacy Rule – This rule requires businesses to provide privacy statements to anyone engaging with their appraisers directly. The statement must include how NPI is gathered, shared and secured as well as methods consumers might use in order to opt out of that information being shared with outside parties. Emails that contain personal or financial information between yourself and your accountant should always be encrypted in order to safeguard that sensitive information under the GLB Act.

What Does this Mean for Convenience?

One popular and effective method dental practices and other businesses are turning to in order to comply with the rules of standing law, as well as further laws that are anticipated, is through the use of secured client portals.

These portals serve as alternatives to email that hold sensitive client information in a secure online storage area. With portals, accountants can upload information to the portal, which then sends an email to the client letting you know that you have new information waiting for you. You then log in with your password and retrieve the information.

The risks involved in email communications today are simply too big for such vital information. Take precautions to use 256-bit encryption when transmitting sensitive information and files to your dental accountant or use the accountant’s secure portal. Keep this in mind and avoid those risks completely.

Dentist Opening New Practice Needs Bookkeeping Advice

A dentist who was about to open their first dental office approached Only for Dentists for advice. Their original plan was to do all of their monthly accounting and then hire a CPA for the annual returns. They were getting close to their opening date and their anxiety was growing, wondering if it was really worth it to save a little money. They were quoted by a firm for $300 monthly retainer to do everything for them, but weren’t sure if that was reasonable or not.

This is a very exciting time in a dentist’s career. Bassim Michael, dental CPA and founder of Only for Dentists, had the following suggestions for this new dentist. He recommended that if the dentist has the time, is willing to learn how to use QuickBooks and makes sure it is set up correctly, then it is completely fine to try it himself. Investing the time in set up and training from the beginning can help save a lot of time and heartache down the road. Once the file is set up, a CPA should review the file on a quarterly basis to make sure that the books are maintained correctly and to get proper advice and planning. From our experience, if the QuickBooks file is not set up correctly, clean ups could be more costly than if the practice had outsourced that function.

Dealing with a dental CPA can add special value, since their financial and tax knowledge is tailored to a practice’s specific needs.

Please contact us if you need help with your start-up practice’s financials.