Accounting Frequently Asked Questions
Below are answers to frequently asked questions about Open Dental's Accounting feature.
What types of accounts can you set up?
- Asset accounts: e.g. practice checking account, equipment, cash box
- Liability accounts: Loans
- Equity accounts: Owner/Practice Contributions/Capital, Retained Earnings
- Income accounts: For accounts receivable (e.g. sources of revenue such as patient or insurance payments)
- Expense accounts: For accounts payable (e.g. expenses such as supplies, utility bills, employee benefits, etc.)
How do I add an account type to the Chart of Accounts?
In the Manage module click Accounting, Add, select the Type then enter a description of the account.
What do I need to do to get started?
- Create at least one asset, expense, and income account.
These account types are already created in Open Dental, but you can also edit, delete, or add new ones.
- When Deposits are created in Open Dental, an entry goes into an Asset account (e.g. checking account) to balance your bank account. A second entry is made in an Income account to keep track of the income total. Define the accounts, in Accounting Setup, Automatic Deposit Entries:
a. Add the asset accounts where Deposits can be automatically deposited into. Usually it is the checking account where deposits are made. The first one listed will be the default when creating a deposit.
b. Select the income account.
What is "Automatic Payment Entries" for on the Setup Accounting window?
It is commonly used for cash payments from patients. When you click Add, you will be prompted to select a payment type (defined in Definitions, Payment Types) and add accounts the cash will be 'deposited' into (we recommend using a second asset account such as 'Cash Box'). Also select an income account so the transactions are included when tracking total income.
- Cash box accounts should be treated like a checking account. All money going in and out must be recorded as a deposit to another account or as an expense. If not automatically added, manually enter the accounting transaction in the Cash box account.
- A checking account does not make sense as a deposit account since each entry in a checking account is reconciled with a transaction recorded by the bank.
How are deposits assigned to an account?
When you create a new deposit, the account that will receive the deposit is listed under 'Deposit into Account' on the Edit Deposit Slip window. The default account is the first one listed in for Automatic Deposit Entries.
How do I enter a transaction for a payment (e.g. utility payments, rent)?
We recommend entering a negative payment from an asset account like a checking account. It is easier to remember that a negative number here deducts from your asset account balance. If you instead enter the payment from an expense account, the payment amount should always be positive since it adds to the expense total.
- Double click the account to open it.
- Click Add.
- Enter the payment (as a negative number from an asset account, or as a positive number from an expense account).
How do I account for a patient refund?
In Open Dental, patient refunds are usually entered as a negative patient payment. They will show in the Deposit window as a negative payment, however shouldn't be included in a deposit since you are not receiving any income. To account for the refund in accounting, manually enter a new transaction to balance the accounts. Usually it is added as a negative entry to an Income account or positive entry to a Expense account (e.g. Patient Refunds). You may need to read up on how credit adjustments are applied to patient accounts to make sure that a patient account is properly balanced.
When do I need to create a manual deposit entry (DEP)?
When you receive income from a non-patient source (e.g. a vendor refund). Manually create a deposit entry in the Asset account, split to an account that makes sense for the payment source.
What is the Reconcile button for?
This is only visible when viewing an Asset account and is used to Reconcile transactions with bank account statements.
A statement is reconciled when the Sum of Transactions and the Target Change equal in value. If they do not match, there is an incorrect or missing entry.
How do I use the Deposits feature in Open Dental with QuickBooks?
In Accounting Setup, select QuickBooks in the upper right under Deposit Software. For first time setup, read the Accounting: QuickBooks carefully.
Just like in Open Dental accounting, linking your Quickbooks file will allow the software to create deposit entries in Quickbooks accounting (checking account and income account).