9.28.07 - Issue # 290 Forward This Newsletter To A Colleague

By Susan Gunn

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Why Choose QuickBooks for Your Practice?

At almost every dental meeting’s QuickBooks® course I give, someone asks why he/she should use QuickBooks® instead of Quicken®.  I’m always surprised at the number of times I’m asked this question.

Let’s clear up some of the confusion!

Quicken® is personal financial software and QuickBooks® is business financial software.

Is that really a big deal? Yes, for reasons that are – or should be – near and dear to your heart:

  • Good financial management.
  • A good relationship with the IRS (hopefully long-distance)
Good financial management

There is a bewildering number of small business accounting software available, such as Peachtree®, MYOB® and Microsoft’s Small Business Accounting®.  In addition to whichever software you choose, it must then be customized to complement your practice management software, as neither one is designed to do both accounts payable and accounts receivable.

For instance, ACCOUNTS RECEIVABLE (patients’ information, treatment plans, payments, etc), is contained within your practice software, while ACCOUNTS PAYABLE (vendors, staff payroll, etc) is contained within your accounting software.

The reason I recommend QuickBooks® over any other accounting software is its ease of use.  The tasks are logical and the layout makes it visually easy to understand, especially in comparison to other software.

When set up and used correctly by your practice, QuickBooks® provides the critical information you need not only to manage your practice more effectively, but to give your accountant the information they need to prepare your taxes. 

There are two distinct ways to customize your accounting software: for tax accounting or practice financial analysis. 

Most accountants create QuickBooks® for the purpose of tax accounting.  After all, this makes it easier to do the practice’s taxes.  However, if the accounting software is designed for practice financial analysis, the accountant can then take the same information and generate your taxes and you can understand your financial reports more clearly. 

The key is in the practice’s “chart of accounts.”  Simply put, this list is how you analyze the money coming in and the money going out.  The new Practice Management Chart of Accounts, in the Getting The Most Out Of QuickBooks In Your Practice books, was designed with practice financial analysis in mind. 

The layout of the expense account listing determines the Profit & Loss report layout.  When account lists are designed for tax accounting, grouping the expense types is most often overlooked.  When account lists are designed for financial analysis, the expenses are grouped logically together for easier overhead analysis of these expenses.

Good relationship with the IRS

Practices need to keep a six-lane highway between business and personal finances. Why? Consider these common scenarios:

  • You, or your heirs, need to sell your practice suddenly.
  • You need to acquire a practice loan.
  • You are scheduled for an IRS audit.

In all three instances, and many others, you need to answer any questions regarding your practice’s finances without your personal finances being involved.  How can you determine what your true practice overhead is when your personal finances are included in your accounting software? 

When personal finance software is used, the tendency is to include personal transactions.  Quicken can be customized to track your business finances but why bother when a business software is available?  What reports must be customized in Quicken to do, are readily available in QuickBooks®.  When reports can be easily exported into Excel® from QuickBooks® you must cut/copy/paste into Excel® from Quicken®

Professional business finances do not include personal expenditures, regardless of your actual legal business type.  Dental practices are such professional businesses.  These expenditures kept separate will help form good relationships with the IRS.

No more excuses! 

Getting The Most Out Of QuickBooks In Your Practice is a complete reference guide for a dental practice’s use of QuickBooks.  Every practice using QuickBooks needs this book and not because I wrote it.   To understand the day to day practice’s use of QuickBooks, to use it not only correctly but to maximize its use of QuickBooks, to learn how to organize the practice’s financial data, these can all be easily understood. 

Using QuickBooks should not be frustrating.  Using Getting The Most Out Of QuickBooks In Your Practice as your guide can make the most difficult tasks, easy to understand.

Why use accounting software at all? 

A dental practice is a business. All businesses need to know how they make money and where it is spent.  Successful businesses know exactly where it goes, for what, and to whom!

Are you one of them?

Susan Gunn has been a QuickBooks® consultant for over 13 years, written 14 books and has been an Advanced Certified QuickBooks® ProAdvisor since Intuit established the program.  She provides a variety of means to accomplish QuickBooks® competency through books, courses, online and onsite consulting.  A nationally recognized speaker, Susan lives in Arlington, TX.

To order Susan’s book, Getting The Most Out of Quickbooks In Your Practicego here

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