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  05.26.05 Issue #168

   

Everybody Makes Mistakes


By Susan Gunn


Mistakes happen. Some can be corrected. Especially in QuickBooks™. With QuickBooks™ being the number one recommended software for dental practice accounting, I have seen hundreds of mistakes made in dental practices. Here are just a couple.

Not separating deposits for easier banking account reconciliation.
Because dental practice software manages all the accounts receivables, creating deposits in QuickBooks™ is easy. You will enter the deposits into QuickBooks™ just as they are entered in to your bank. For bank reconciliation purposes, credit cards deposited separately into your banking account, need to be a separate deposit line item (i.e. Mastercard/VISA, Discover, American Express, etc.). This mistake occurs primarily due to other's manuals and training classes not geared towards professional practices. Both guide users to enter one daily deposit, lumping payments from customers into split lines. Since payments are not received through QuickBooks™ but your practice software, follow these suggestions:

  • Create a main income type of “Deposits” and create subaccounts for “Checks & Cash”, “M/C & VISA”, “Discover”, “American Express”, and any others.
  • When entering deposits from the practice software's day sheet, enter each of these deposits separately, with the date from the day sheet or the physical deposit date.

Each piece of information should be verified with your daysheet. The MC/VISA total should match the MC/VISA total from the day sheet. The Checks & Cash total on the physical deposit slip should match the Checks & Cash total from the day sheet. Each one of the deposit totals should be verified with the day sheet. This is accountability. For easy reference, staple the physical check deposit slip & credit card terminal summary to the day sheet. This way, if you have any future questions regarding deposits, the information is all together.

Patient Reimbursements are not expenses.
Because your accounts receivable is maintained in your practice software, when you enter income into QuickBooks™, your accounting becomes cash basis. Long after the patient has written a check and it has been deposited, the insurance company often pays more than what was estimated. When writing a reimbursement check, the account chosen under the expenses tab is actually an income account, “Patient Reimbursements”, not an expense account. This deducts the patient reimbursement from what was previously entered as income, keeping your true income accurate. After all, you really don't want to pay taxes on income you can't spend, right?

Opening balance to reconcile the bank statement is not correct.
When a bank statement is reconciled, a check mark is placed in each reconciled transaction's entry in the check register. For whatever reason, sometimes those transactions are deleted or unreconciled. There is a QuickBooks™ warning that says “Are you sure you want to delete this reconciled transaction?” Or, if voiding, the warning says, “You have changed a transaction that has already cleared…” If you delete or void a transaction after these warnings, it will add the amount of the transaction (a previously reconciled amount) to the opening balance for your next reconciliation. If this has happened to you, beginning with QuickBooks™ 2004 editions, there is a bank reconciliation discrepency tool. This tool creates a report that will show deleted, voided or changed transactions. The QuickBooks In Your Practice Primer has detailed information regarding using this tool when your opening balance is incorrect.

At a recent ADA Meeting, I was talking with a dentist who confirmed a couple of these common mistakes in her QuickBooks™. After reassuring her she was not alone in these mistakes, I showed her where in the Primer workbook I cover these mistakes in detail. After all, a bigger mistake is to believe you already know everything about QuickBooks™.

If you found problems in your QuickBooks™, don't distress! Everyone makes mistakes, they are a part of learning and are easy to fix in QuickBooks™ ! Happy Accounting!

To order Susan's QuickBooks™ 2005 In Your Practice Primergo Here

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