How to Build a Dental Practice Monthly Close Checklist

Build a dental practice monthly close checklist in dependency order: freeze source reports, reconcile payment activity to deposits, resolve patient credit and payroll differences, review balance-sheet support, and approve the reporting package. Each step needs evidence, an assigned person, and a completion decision. A ticked box without a reconciled balance does not establish that the month is ready.

This guide covers how the accounting team gets to release. Our monthly close reporting guide describes what the owner should receive, and our dental P&L guide explains how to read the result. This checklist concentrates on the dental records that must agree before those reports become useful.

Set the period, basis, and release standard

Put the reporting month, entities, locations, accounting basis, source report dates, preparer, and reviewer at the top. Agree on the intended delivery date and criteria for unresolved items. A small documented difference may be handled differently from an unexplained deposit or a significant unpaid compensation balance.

Choose one cutoff for each source export and retain it. Later practice-management edits should enter an exception log so the accounting team can decide which period is affected. Do not silently rerun one report while retaining older supporting schedules and assume they still reconcile.

IRS Publication 538 explains general cash and accrual timing, with exceptions. Ask the accountant how the management report basis relates to tax reporting. The checklist should apply that documented policy consistently rather than turning a software report setting into a tax-method decision.

Reconcile payments through the clearing accounts

Download patient and insurer payment activity, processor settlements, EFT remittances, and bank statements through month end. Match batches using identifiers and dates. Separate receipts posted to patient accounts from money actually settled. Reconcile checks and cash with deposit records under the practice's handling procedures.

Original hypothetical deposit example: Assume opening processor clearing is $4,000. The practice records $96,000 of card receipts, $2,000 of refunds, $2,800 of processor fees deducted from settlements, and $91,500 deposited to the bank. Closing clearing is $4,000 + $96,000 − $2,000 − $2,800 − $91,500 = $3,700.

The preparer supports that $3,700 with identified unsettled batches. It is not additional revenue. If the next settlement report supports only $3,200, investigate the $500 difference. Do not post $500 to miscellaneous expense merely to clear the account. Possible explanations belong in the exception log until supported.

These figures assume the fees and refunds flow through this clearing account and are not already netted in recorded receipts. If the practice uses a different posting design, adapt the bridge. Confirm that fees have not been expensed twice and that bank deposits have not been recorded as a second set of patient receipts.

Review patient credits and receivables separately

Prepare a patient credit schedule with opening balance, new credits, credits applied, refunds, and closing balance. Identify unapplied insurance payments and duplicate receipts. Have the billing team investigate individual balances in its secure system; the accountant can review coded summaries without unnecessary clinical details.

For an invented rollforward, opening patient credits of $12,000 plus $8,000 of new credits less $5,500 applied and $1,500 refunded leave $13,000. Verify $12,000 + $8,000 − $5,500 − $1,500 = $13,000 against the source report and the approved ledger treatment. This is a reconciliation model, not a determination of refund rights or state requirements.

Compare receivable aging and adjustments with prior periods. Investigate significant old claims and unusual write-offs with the billing lead. Do not equate gross production, net production, recorded receipts, and recognized revenue. The applicable report basis determines which balances appear in the ledger and which remain supporting operating schedules.

Complete payroll, laboratory, and balance-sheet support

Reconcile payroll registers to gross wages, employee withholdings, employer costs, liabilities, and bank withdrawals. Maintain separate support for associate variable pay and approved unpaid amounts. Record provider assignment changes and guarantee calculations so a later payroll adjustment can be traced back to its source.

Review laboratory bills and significant supplies for cutoff under the agreed accounting policy. Match equipment purchases to invoices and financing records. Split loan payments between principal and interest using the lender schedule; reconcile closing debt to lender support. Identify owner transfers for the accountant's classification rather than burying them in operating costs.

Give every material balance-sheet account a schedule or third-party support. The SEC financial-statement guide distinguishes the balance sheet, income statement, and cash-flow statement. A plausible profit number does not resolve unsupported cash, payroll, or debt balances.

Use an exception log to make release review concrete

For each exception, record amount, period, source, financial impact, responsible person, and next date. Distinguish a known timing item from an unexplained error. Tell the owner when a report is provisional and which decision the uncertainty could affect. Avoid presenting a provisional balance as final without that explanation.

The reviewer should confirm that major reconciliations tie, unusual movements have explanations, corrections are approved, and the report package uses consistent versions. Save the release date and reviewer approval. Apply the accounting system's period protection according to the practice's process and document later changes.

TaxBowl's dental practice accounting services can help establish the close responsibilities and reconciliation packet. Bring the latest source exports, clearing-account detail, payroll registers, and unresolved-item list. Use the first completed close to identify the recurring bottleneck and assign its resolution before the next month ends.