How to Do Accounting for a New Dental Practice Without an Accountant
Learn to manage your new dental practice's accounting without an accountant. Practical steps, tools, and tips for 2026.
Starting a dental practice means wearing many hats, and accounting is one you might not have trained for. But you can handle it yourself with the right systems. This guide shows you exactly how to set up bookkeeping, track expenses, manage payroll, and stay tax-ready, all without hiring a full-time accountant. You’ll need about 5 to 10 hours per month to stay on top of it, and you can do it with software that costs $30 to $100 per month.
Set Up Your Chart of Accounts
Your chart of accounts is the backbone of your bookkeeping. It’s a list of categories where you record every transaction. For a dental practice, you need at least these categories:
- Revenue: Patient payments, insurance reimbursements, and other income.
- Cost of Goods Sold (COGS): Dental supplies, lab fees, and materials directly tied to procedures.
- Operating Expenses: Rent, utilities, staff wages, marketing, software subscriptions, and equipment maintenance.
- Owner’s Draw: Money you take out of the business for personal use.
Most accounting software, like QuickBooks or Xero, has a default chart of accounts. Customize it to fit dentistry. For example, add a category for “Dental Supplies” and “Lab Fees” under COGS. Keep it simple: 20 to 30 categories is enough for a new practice.
Choose the Right Accounting Software
You need software that handles invoicing, expense tracking, and basic reporting. Here are four options with 2026 pricing:
| Software | Price (per month) | Best For |
|---|---|---|
| QuickBooks Online Simple Start | $30-$40 | Solo practices, basic needs |
| Xero Starter | $25-$35 | Practices with multiple users |
| Wave (free) | $0 | Very small practices, but limited features |
| FreshBooks | $25-$50 | Service-based businesses, easy invoicing |
All of these integrate with dental practice management software like Dentrix or Eaglesoft, so you can automatically import patient payments. Choose one that offers a mobile app, so you can snap photos of receipts on the go.
Track Every Expense, From Day One
Start tracking expenses immediately, even before you open your doors. Open a separate business bank account and use it for all practice-related purchases. Never mix personal and business funds. Use a business credit card for supplies and equipment, and link it to your accounting software.
For cash purchases, keep receipts and log them weekly. Use a simple spreadsheet if you prefer, but software is faster. Categorize each expense as you go. For example, a new dental chair goes under “Equipment,” not “Supplies.” This saves time at tax season.
Record Revenue Correctly
Your practice will have two main revenue streams: patient payments and insurance reimbursements. Record each payment when you receive it, not when you bill it. This is called cash-basis accounting, and it’s simpler for new practices. Most dental software tracks patient balances, but you still need to reconcile that with your bank deposits.
At the end of each month, compare your software’s revenue total to your bank statement. If they don’t match, find the discrepancy. Common issues: uncashed checks, insurance payments that arrived after you recorded them, or patient refunds. Reconcile monthly to avoid a mess later.
Manage Payroll Without an Accountant
Payroll is the trickiest part, but you can do it with a payroll service. Options include:
- Gusto: $40-$60 per month plus $6-$12 per employee. Handles payroll, taxes, and filings.
- ADP: $50-$100 per month, more scalable.
- SurePayroll: $30-$50 per month, simple for small teams.
You’ll need to pay yourself a salary, too. As a practice owner, you can take a reasonable salary and then take additional owner’s draws. Payroll services calculate federal and state taxes, but you’re still responsible for filing quarterly estimated taxes. Set aside 25% to 30% of your net income for taxes, and pay quarterly to avoid penalties.
Prepare for Tax Season All Year
Don’t wait until April. Keep a digital folder for tax documents: receipts for equipment, mileage logs, and bank statements. Use accounting software to generate a profit and loss statement (P&L) at the end of each month. This shows your income and expenses, and it’s what you’ll use to file your business taxes.
If you’re a sole proprietor, you’ll file Schedule C with your personal tax return. If you’re an LLC or S-corp, you’ll file separately. Either way, you can do it with tax software like TurboTax or H&R Block, which cost $50 to $150 per filing. But consider hiring a CPA for your first year, just to review your setup. That costs $300 to $800, but it’s a one-time investment to avoid costly mistakes.
Create a Monthly Routine
Set a recurring schedule to keep your books clean:
- Weekly (30 minutes): Categorize new transactions, reconcile bank accounts, and pay bills.
- Monthly (2-3 hours): Run a P&L, review your balance sheet, and reconcile all accounts.
- Quarterly (1 hour): Pay estimated taxes and review your cash flow.
Use reminders in your calendar. Consistency is key. If you fall behind, it takes twice as long to catch up.
FAQ
Q: Do I need a separate business bank account? Yes. It’s essential for clean accounting and legal protection. Open a business checking account and a business credit card. This keeps personal and business finances separate, which is required for LLCs and S-corps.
Q: Can I use Excel instead of accounting software? You can, but it’s risky. Excel is prone to errors and doesn’t automate bank feeds. For a new practice, software saves time and reduces mistakes. Start with Wave if you’re on a tight budget, then upgrade as you grow.
Q: How do I handle sales tax on dental services? Most dental services are tax-exempt, but some products like teeth whitening kits may be taxable. Check your state’s rules. If you do collect sales tax, set up a separate liability account and remit it monthly or quarterly.
Q: What if I can’t keep up with bookkeeping? Consider a virtual bookkeeper who charges $200 to $400 per month for a few hours of work. That’s cheaper than a full-time accountant and still keeps you in control. But for the first year, try doing it yourself to understand your numbers.
Related guides
- Cash vs Accrual Accounting for New Dental Practices
- 7 Mistakes New Dental Practices Make in Their First Year
- 7 Questions to Ask Before Buying a New Dental Practice
The bottom line
You can absolutely handle accounting for your new dental practice without an accountant. Start with a solid chart of accounts, choose software that fits your budget, and track every transaction from day one. Set up payroll through a service, and stay on top of taxes with a monthly routine. The key is consistency: spend a few hours each month, and your books will be accurate and ready for tax season. If you ever feel overwhelmed, you can hire a bookkeeper for a few hundred dollars a month, but you’ll have the knowledge to manage it yourself when you need to.