The Financial Side of Dentistry by Wesley Read, CPA, CFP

Ongoing financial responsibilities of a dental practice owner

Part 2 of 3

by Wesley Read, CPA, CFP

Even with a strong front office team and a good CPA, certain financial responsibilities should always remain with the doctor. These habits protect cash flow, reduce risk, and improve long-term profitability.

Cash and deposit controls
Doctors should periodically review the practice management system day sheet and verify that deposits appear in the bank account. It is important that the front office team knows this comparison is being performed, as it is one of the strongest deterrents to embezzlement.

Cash and checks should always be stored in a locked safe until deposited. While deposits do not need to be made daily, deposit amounts should always be bundled by day so they clearly match the corresponding day sheets.

For example, if a dentist works four days per week but only goes to the bank once per week, the practice should make four separate deposits at the same time, each representing one specific day’s collections. Deposits should never be lumped together across multiple days.

This structure improves auditability, simplifies reconciliation, and significantly reduces the risk of errors or inappropriate handling of funds.

Credit cards and spend management
Every owner should implement a structured credit card or “spend management” system. Virtual cards should be created for vendors, with spending limits and category restrictions in place. This reduces fraud risk and prevents uncontrolled spending.

A spend management system centralizes credit cards, expenses, approvals, and accounting integration, giving the doctor real-time visibility into where money is going. Platforms like Ramp bundle a broad set of tools to enforce budgets and spending controls. The Ramp integration with QuickBooks Online should be properly configured, and the setup should be reviewed with the practice’s CPA.

Financial reporting and review
Doctors should review their financial statements monthly and understand what the numbers are telling them. This includes the profit and loss statement, balance sheet, and key dental-specific metrics.

Both Ramp (for credit cards) and RelayFi (for debit cards) allow efficient sharing of financial data with the CPA, enabling more real-time reporting and faster monthly closes. This leads to better decision-making and fewer surprises.

For deeper education, doctors can turn to dental practice finance podcasts and educational resources that explain how to analyze financial statements and understand what truly drives profitability.

Meet with your CPA at least twice per year
In addition to monthly reporting, every dental practice owner should meet with their CPA at least twice per year for proactive financial planning.

At these meetings, the doctor should request:

• A rolling cash flow forecast to understand liquidity and upcoming obligations

• A tax projection covering federal, state, and local taxes

• A detailed P&L analysis to identify trends and improvement opportunities

The discussion should include how and when tax payments will be made, including estimated payments and withholdings. The CPA should also confirm that the doctor’s W-2 compensation is appropriate and defensible, particularly for owners of S corporations.

The doctor should review whether there are any excess distributions or loan-to-shareholder issues that need to be addressed before they become compliance problems.

Finally, the depreciation strategy should be discussed carefully. While accelerated depreciation on equipment purchases can create short-term tax savings, when a dentist uses Section 179 depreciation on financed equipment (i.e., no initial out-of-pocket spend), the decision can create future tax exposure. Owners should work with their CPA to balance cash flow, tax efficiency, and long-term planning to avoid unintended tax consequences.

Wesley Read is the CEO of PracticeCFO and host of the Dental Boardroom Podcast. He brings extensive expertise as a certified public accountant, certified financial planner, and Series 65 licensed advisor. He earned both his bachelor’s and master’s degrees in accountancy from Brigham Young University.