Guide · 8 min read
Production isn't profit. Track collections, write-offs, lab fees, and overhead so you know what your practice actually keeps.
A dental practice's P&L looks nothing like a freelancer's. You bill insurance, write off contractual adjustments, pay lab fees per case, and split production with associates. Without a chart of accounts that mirrors this, you can't tell whether a slow month is a payer problem, a supply problem, or a staffing problem.
Income: Production, Insurance Adjustments (contra), Patient Refunds. Expenses split into Lab, Supplies, Staff, Rent, Marketing, Admin, CE, Insurance, Equipment.
Open Dental, Dentrix, or Eaglesoft track production. Your books should match collections (not production). Run a daily deposit log and tie it to the merchant statements monthly.
Lab fees should never exceed 10% of crown/bridge production. Tag invoices to the producing doctor — it's the only way to spot a doctor whose work is over-labbed.
Collections, adjustments, overhead %, lab %, new patients. Five numbers, monthly. Most owner-dentists who track these add $50–80k in net income within 12 months.
SnapBooks pre-loads a dental chart of accounts and tracks the ratios that matter.
Start freeYes. A practice has unique line items most accounting software ignores — insurance write-offs, patient receivables, lab fees, supply COGS, and associate doctor splits. Generic chart-of-accounts setups understate true overhead by 10–20%.
Record gross production, then a contra-revenue account called 'Insurance Adjustments'. Net collections = production − adjustments − refunds. Without this split you can't see which payers are eroding your margin.
60–65% of collections for a general practice, 55% for specialists. Anything over 70% means staff, supplies, or lab costs are out of control. Monthly bookkeeping is the only way to spot it before year-end.
Most associate dentists should be W-2 — the IRS scrutinizes 1099 classification in healthcare heavily. Track their production and pay percentage in a separate sub-ledger so end-of-month payroll math is fast.
Continuing education, state license renewals, malpractice insurance, dental society dues, loupes & equipment, lab fees, sterilization supplies, practice management software, and DSO/consulting fees.