Dental bookkeeping
Practice management software tells you production. Your books have to tell you what was actually collected, what it cost, and what you owe. Those are not the same numbers.
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Production is not revenue
Every practice management system reports production, and it is the number most owners quote. It is not what your books should record. Production is work performed. Revenue is what was billed and collectible, and cash is what actually landed after insurance adjudication, patient portions, and write-offs.
The gap between those three is where practice bookkeeping goes wrong. Insurance receivables sit outstanding, predeterminations get recorded as though they were accepted, and adjustments are never posted, so the books drift from reality until year-end forces a reconciliation.
Bookkeeping that reconciles to deposits daily closes that gap. You see collected revenue rather than optimistic production.
The exempt and taxable split, every period
Because most basic dental services are exempt and cosmetic work generally is not, your chart of accounts has to keep those revenue streams apart from the first entry. If they are recorded together, the input tax credit apportionment has to be reconstructed at filing time, which is slow and inconsistent between periods.
Separating them at source means each HST return is prepared from the books rather than estimated on top of them, and the method stays the same quarter to quarter, which is what CRA expects.
Lab fees and the real margin
Lab fees are a direct cost of the clinical work, not overhead. Booked as a cost of sales, they let you see gross margin on production, which is the number that tells you whether your fee schedule and your lab choices actually work together. Buried in general expenses, they tell you nothing.
The same logic applies to clinical supplies. Separating what is consumed per procedure from what it costs to keep the doors open is the difference between a practice that knows its margin and one that only knows its bank balance.
What a month looks like
Deposits, card settlements, and insurance payments are categorized and reconciled as they land, so the books are current within twenty-four hours rather than ninety days. You approve what the AI categorized, a couple of minutes a week. At month-end every account is balanced and a Canadian accountant reviews and signs the report. The chart of accounts is built to map onto GIFI so the year-end corporate return is a translation, as explained in our guide on the chart of accounts.
What’s included
- Deposits, card settlements, and insurance payments reconciled daily
- Exempt and taxable revenue kept separate from the first entry
- Lab fees and clinical supplies tracked as cost of sales
- Insurance receivables tracked rather than assumed collected
- Every account balanced at month-end and signed by a Canadian accountant
- Chart of accounts mapped to GIFI for a clean year-end return
Also: Dentists in Ontario · Dentists in Toronto · Health & wellness. More for this industry: Dental accounting · Dental bookkeeping · Dental payroll
All four services: Bookkeeping · Tax · Payroll · Business advisory
Common questions
Why should production and revenue be tracked separately?
Production is work performed. Revenue is what was billed and collectible, and cash is what landed after insurance adjudication, patient portions, and write-offs. Recording production as revenue overstates the practice and hides outstanding receivables.
How should lab fees be recorded?
As a cost of sales rather than overhead. That way you can see gross margin on clinical work, which tells you whether your fee schedule and lab costs are aligned. Buried in general expenses they tell you nothing.
Do I need to separate exempt and taxable revenue in my books?
Yes. Because most basic dental services are exempt and cosmetic work generally is not, keeping the streams apart from the first entry means each HST return is prepared from the books rather than reconstructed at filing time.
Does this replace my practice management software?
No. Your practice software runs the clinical and scheduling side. taxifi keeps the accounting records, reconciles what was actually collected, files the HST, runs payroll, and prepares the corporate return.
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