Monthly Close Checklist for Dental Practice Accountants

It is the fifth of the month. Your dental client expects financials by the tenth. Do you have a systematic process, or are you scrambling?

Why Dental Monthly Close Is Different

Closing the books for a dental practice is not the same as closing for a retail store or professional services firm. Dental practices have unique revenue cycle characteristics that complicate month-end:

Multiple payment sources. Patient payments, insurance payments, financing companies, and sometimes government programs all flow into the same accounts.

Payment timing disconnects. Production happens in one month. Insurance pays weeks later. The cash arrives on a different day than the remittance advice. Matching requires careful attention.

PMS as a parallel system. The practice management system tracks clinical and billing data separately from accounting software. These systems must reconcile.

High transaction volume. A busy practice processes hundreds of payments monthly. Errors hide in volume.

Accountants serving dental clients need a systematic monthly close process that accounts for these complexities. This checklist provides that framework.

Pre-Close Preparation (Days 1-3)

Before diving into reconciliation, gather what you need.

Obtain Bank Statements

Secure complete bank statements for all practice accounts:

Operating account
Payroll account (if separate)
Savings or reserve accounts
Merchant account statements

Verify statements cover the full month with no missing days.

Obtain PMS Reports

Request key reports from the practice management system:

Production report: Total production by provider, by date, and by procedure category.

Collection report: Total payments received by type (patient, insurance, cash, credit card).

Adjustment report: All adjustments, write-offs, and discounts with reason codes.

Accounts receivable aging: Current AR by age bucket and payer type.

Credit balance report: All patient accounts with credit balances.

Deposit report: Daily deposits recorded in the PMS.

Obtain Supporting Documentation

Request additional documentation as needed:

Credit card batch settlement reports
Insurance ERA summaries
Patient financing statements (CareCredit, Sunbit, etc.)
Payroll reports
Loan statements

Review Prior Month Items

Pull forward any items from last month's close:

Unresolved reconciliation items
Pending adjustments
Items flagged for follow-up

These need attention during this close.

Bank Reconciliation (Days 3-5)

Operating Account Reconciliation

Reconcile the main operating account to the PMS:

Step 1: Compare totals.

Total deposits per bank statement
Total deposits per PMS deposit report
Document the variance

Step 2: Categorize deposits.

Patient payments (cash, check, credit card)
Insurance payments (EFT, check)
Other deposits (loans, owner contributions, refunds received)

Step 3: Match deposits individually.
For each bank deposit, identify the corresponding PMS entry. Flag any deposits that cannot be matched.

Step 4: Investigate variances.
Common variance causes:

Timing differences (deposit made end of month, cleared beginning of next)
Unposted insurance EFTs
Credit card batch timing
Misclassified deposits

Step 5: Document resolution.
For each variance, document:

The cause
How it was resolved
Any adjusting entries needed

Credit Card Reconciliation

Credit card deposits require separate attention:

Match PMS credit card payments to merchant deposits.

Run PMS report of credit card payments by date
Compare to merchant account deposits
Account for processing fee deductions
Identify timing differences (batch date vs. deposit date)

Calculate effective processing rate.
Total fees divided by total volume. Flag if significantly different from prior months.

Reconcile any chargebacks or refunds.
Verify these are properly recorded in both PMS and accounting.

Other Account Reconciliation

Reconcile any additional accounts:

Payroll account (if separate)
Savings accounts
HSA or FSA accounts managed by the practice

Insurance Revenue Reconciliation (Days 4-6)

Insurance payments are the most complex reconciliation area.

Match EFT Deposits to ERAs

For each insurance EFT deposit:

Locate the corresponding ERA
Verify the ERA total equals the deposit
Confirm payments were posted to patient accounts

Flag any deposits without matching ERAs for investigation.

Review Insurance Payment Posting

Sample-check insurance payment postings:

Select 10-15 insurance payments from the month
Verify they were posted to correct patients and dates of service
Verify adjustments were posted correctly
Verify patient balances are accurate post-posting

Identify Unposted Insurance Payments

Compare insurance deposits received to insurance payments posted:

Total insurance bank deposits
Total insurance payments posted in PMS
The difference indicates unposted payments

If significant unposted payments exist, work with the practice to resolve before finalizing.

Review Take-Backs and Recoupments

Identify any insurance take-backs during the month:

Were they properly recorded?
Were original payments adjusted?
Are patient balances correct?

Production and Collection Analysis (Days 5-7)

Verify Production Accuracy

Review production for reasonableness:

Compare to prior months and same month prior year
Look for unusual spikes or drops
Verify production by provider makes sense

Production anomalies may indicate:

Posting errors
Procedure code issues
Fee schedule problems

Calculate Collection Metrics

Calculate key collection ratios:

Gross collection rate: Collections / Production

Net collection rate: Collections / (Production - Contractual Adjustments)

Collection rate by payer: Break down by insurance vs. patient

Compare to prior periods and industry benchmarks. Significant changes warrant investigation.

Analyze Adjustments

Review the adjustment report:

Are adjustment categories consistent?
Are adjustment totals reasonable relative to production?
Are there unusual adjustment patterns?

Red flags:

Round-number adjustments
Spikes in certain adjustment types
Adjustments without proper reason codes

Review AR Aging

Analyze accounts receivable:

What percentage is over 90 days?
How has aging changed from prior month?
Are there specific payers with growing AR?

AR over 90 days is often uncollectible. Discuss write-off strategy with the practice owner.

Credit Balance Review (Day 6)

Analyze Credit Balances

Pull the credit balance report and analyze:

Total credit balance amount
Number of accounts with credits
Age distribution of credit balances
Largest individual credit balances

Categorize Credit Balances

For significant credit balances, determine cause:

Patient overpayment (needs refund)
Insurance overpayment (needs refund)
Posting error (needs correction)
Unapplied payment (needs application to services)

Recommend Action

Provide the practice with a credit balance action list:

Refunds to process
Errors to correct
Items needing investigation

Credit balances represent liability. They should not accumulate month over month.

Adjusting Entries (Days 6-7)

Standard Monthly Entries

Prepare standard adjusting entries:

Depreciation
Prepaid expense amortization
Accrued expenses
Loan interest accrual

Revenue and Expense Accruals

Consider whether accruals are needed for:

Production completed but not yet billed
Insurance payments received but not yet posted
Expenses incurred but not yet invoiced

Accruals depend on the practice's accounting method and materiality thresholds.

Reconciliation Adjustments

Post any adjustments needed to reconcile:

Bank reconciliation adjustments
Credit card fee accruals
Write-offs approved by management

Document the support for each adjustment.

Financial Statement Preparation (Days 7-9)

Generate Trial Balance

Run a trial balance and verify:

All accounts have reasonable balances
Balance sheet accounts reconcile to supporting schedules
Revenue and expense accounts align with expectations

Prepare Financial Statements

Generate standard financial statements:

Income statement (current month and year-to-date)
Balance sheet
Cash flow statement (if required)

Prepare Management Reports

Dental practices benefit from additional metrics:

Production by provider
Collection rate trends
AR aging summary
Payer mix analysis
Key performance indicator dashboard

Compare to Budget and Prior Year

For each major line item:

Compare to budget (if available)
Compare to same month prior year
Document significant variances

Review and Finalization (Days 8-10)

Review Checklist

Before finalizing, verify:

Reconciliations complete:

Bank accounts reconciled
Credit cards reconciled
Insurance payments reconciled
Unidentified deposits resolved or documented

Analysis complete:

Production reviewed
Collections analyzed
AR aging reviewed
Credit balances reviewed

Entries complete:

Adjusting entries posted
Reconciliation adjustments made
Prior period items resolved

Deliverables ready:

Financial statements prepared
Management reports prepared
Variance explanations documented

Client Communication

Prepare client deliverables:

Financial statements with cover memo
Key metrics and trends
Items requiring client attention or decision
Questions for follow-up

Schedule a brief call to review if the client prefers.

Document the Close

Maintain workpapers documenting:

Reconciliation support
Adjustment calculations
Variance explanations
Open items carried forward

Good documentation protects you and serves future reference.

Ongoing Process Improvement

Track Close Timing

Monitor how long monthly close takes:

Where are the bottlenecks?
Which items take the most time?
What information is consistently late?

Use this data to improve processes and set expectations.

Identify Recurring Issues

Note issues that repeat each month:

Specific reconciliation problems
Data quality issues
Communication gaps

Address root causes rather than fixing symptoms repeatedly.

Recommend Improvements to Client

Based on your observations, recommend process improvements:

Daily reconciliation to reduce month-end burden
Better documentation practices
System or workflow changes

Proactive recommendations demonstrate value and reduce your future workload.

Monthly Close Calendar Template

Day	Task
1-2	Receive bank statements and request PMS reports
3	Begin bank reconciliation
4	Complete bank reconciliation, start insurance reconciliation
5	Complete insurance reconciliation, begin analysis
6	Complete analysis, review credit balances, prepare adjustments
7	Post adjusting entries, begin financial statement prep
8	Complete financial statements and management reports
9	Review and finalize all deliverables
10	Deliver to client, document the close

Adjust timing based on client deadlines and complexity.

Want to streamline monthly close for your dental clients? Zeldent provides continuous reconciliation that eliminates the month-end scramble. Whether you manage one practice or twenty, our multi-client dashboard gives accountants and bookkeepers clean data from day one, not day ten. Schedule a demo to see how Zeldent supports efficient dental accounting.