Recognizing Expenses in a Timely Fashion
With accrual accounting, you recognize expenses such as salaries, supplies, rent, and utilities when you incur them, not when they’re paid. This gives your dental office a clearer view its profitability and financial health.
Accrual accounting is also a big help to dentists regarding inventory management. If you recognize an inventory item’s expense when it’s used, instead of when it’s purchased, you get a better idea of how much each item costs and of your current inventory levels. As a result, you can better forecast your supply needs, keep from overstocking unnecessary items, and see to it that all your inventory costs are accurately reflected on your financial statements.
