Dentist bookkeeping: when Dentrix says one number and the bank says another

Production is not collections, and your books have to know the difference

Every dental practice runs on two sets of numbers: what Dentrix, ABELDent, or whichever PMS you run says you produced, and what actually landed in the bank account. Between them sit courtesy adjustments, fee-guide differences, claims still sitting with carriers, and patient balances aging quietly at the front desk. When a bookkeeper records bank deposits as revenue, all of that disappears — you see cash, but not the production it came from or the money given up along the way.

We build dental books from the PMS day sheets and reconcile them to deposits monthly. Production, adjustments, and collections each get their own line in QuickBooks Online, so the spread between them becomes a number you manage rather than a surprise at year-end.

From day sheet to general ledger

Month-end starts with the PMS production and collections summaries, mapped into a chart of accounts that mirrors how a practice actually operates: dentistry and hygiene as separate departments, adjustments in the open, and lab fees matched to the cases that caused them.

Insurance A/R is real money, not a PMS report nobody opens

If you take assignment, a large share of production becomes a receivable from Canada Life, Manulife, Sun Life — and now the Canadian Dental Care Plan, whose claims Sun Life administers. We reconcile carrier EFT remittances and explanation-of-benefits detail against outstanding claims each month, so the A/R aging in the ledger agrees with what the PMS says is owed, and rejected claims get corrected and resubmitted while they are still fresh.

The failure mode we fix most often is a PMS showing a healthy practice while deposits shrink, because denied and stale claims were never worked. A monthly tie-out between PMS receivables and the balance sheet ends that drift before it compounds. Patient balances get the same aging treatment, since amounts the desk means to collect at the next visit have a way of aging past collectability.

Hygiene payroll deserves its own cost line

Hygiene is usually the largest wage line in a dental office and the easiest to lose inside one generic salaries account. We split hygienist wages from admin and associate costs and report them beside hygiene production, so you can see whether the department carries its chair time — especially when hygienists are paid hourly and the schedule has gaps that produce less than they cost.

The same discipline applies to associates paid a percentage of collections or of production net of lab fees. Because the ledger tracks production and lab costs by provider, month-end associate calculations come from the books, not from a spreadsheet argument.

Lab fees, HST, and books a buyer will believe

Lab invoices are a direct cost of specific cases, so we post them as cost of dentistry and track them as a percentage of production. A creeping lab percentage is often the first visible sign of underpriced crown-and-bridge fees or a lab relationship worth renegotiating.

Most dental services are HST-exempt, which cuts both ways: you charge no HST to patients, and you recover none on most purchases, so equipment and supplies must be budgeted at their gross cost. A practice doing significant cosmetic work can cross the $30,000 small-supplier threshold on taxable services, which raises a registration question worth asking early. And because the DPC is likely your largest retirement asset, we keep the books clean enough to hand to a buyer's diligence team — production by department, defensible receivables, and no personal costs buried in the practice. If you trained in the US or still hold US accounts alongside the DPC, our cross-border tax guide for dentists covers what the bookkeeping needs to support, and our bookkeeping services page shows how the monthly close works for every client.

Source: Government of Canada — Canadian Dental Care Plan.