Accounting

Your homeowners association collects dues from every owner. That money pays for landscaping, insurance, repairs, and reserves. So where does it all go? When the books are messy, nobody can answer that. Owners grow suspicious. Board members get exposed. Audits turn ugly. Strong HOA accounting prevents all of it. It tracks every assessment in and every dollar out. It keeps operating and reserve funds separate. It produces clean reports your members can trust. This guide covers the methods, the funds, the financial statements, the taxes, and the tools that keep your association healthy and compliant. What Is HOA Accounting? HOA accounting is the practice of recording, tracking, and reporting all the money a homeowners association collects and spends. The association is a nonprofit corporation. It pools dues from owners and manages those funds for the whole community. So the board carries a fiduciary duty to handle that money with care. This work is not the same as small-business accounting. It uses fund accounting, follows special reporting standards, and answers to every member. What comes in: assessments, fees, fines, interest. What goes out: vendor payments, insurance, utilities, reserve contributions. The standard: the Financial Accounting Standards Board governs these groups under its Common Interest Realty Associations guidance, also called ASC 972. The scale is huge. More than 373,000 community associations now operate in the United States, home to over 78 million residents. That is nearly one in four Americans. Why HOA Accounting Matters More Than Boards Realize Board members are volunteers. Most never signed up to manage six-figure budgets. But the law treats them as fiduciaries anyway. That makes solid HOA accounting a legal shield, not just a chore. Most states require associations to keep accurate records and share them with owners. Weak books carry real costs. They lead to surprise special assessments, owner lawsuits, and fraud. Research from the Association of Certified Fraud Examiners estimates that organizations lose about 5% of their revenue to fraud each year. Associations are easy targets when one person controls the money. The stakes rose after the 2021 Surfside condominium collapse in Florida. Lenders, insurers, and states now scrutinize reserves like never before. Buyers also struggle to finance a unit in an association with messy or underfunded books. Legal exposure: poor records put board members personally at risk. Lost trust: owners revolt when numbers do not add up. Sale and refinance trouble: weak books can sink a closing. The 3 HOA Accounting Methods: Cash, Accrual, and Modified Accrual Every association picks an accounting method. The method decides when you record income and expenses. It shapes every report your board reads. Choosing well is the foundation of good HOA accounting. Here is a quick comparison before the details. Method Income recorded Expenses recorded GAAP compliant Best for Cash basis When cash arrives When cash is paid No Very small self-managed associations Accrual basis When assessed When incurred Yes Most associations, audits, lenders Modified accrual When assessed When paid No (interim only) Monthly interim reporting Cash Basis HOA Accounting Cash basis records income when the money lands and expenses when you pay them. It is simple. Say your association gets a $12,000 landscaping invoice in March but pays it in April. Under cash basis, the expense shows up in April, not March. That timing gap hides real obligations. It is not compliant with generally accepted accounting principles. It works only for very small, self-managed associations. Accrual Basis HOA Accounting Accrual basis records income when it is assessed and expenses when they are incurred. Using the same $12,000 invoice, you record the expense in March, when the work happened. This method follows generally accepted accounting principles. Auditors and lenders expect it. It gives the truest picture of your association’s finances. Modified Accrual Basis Modified accrual is a middle path. It records income on an accrual basis but expenses on a cash basis. Many managers use it for monthly reports. It is practical, but it has a blind spot. Unpaid bills do not appear until paid, so the board can miss looming costs. Which Method Is Best for Your HOA Accounting? Accrual is best for most associations. It is the only method that matches generally accepted accounting principles, satisfies auditors, and shows your true position. Your choice also depends on size, state law, and governing documents. Some states require accrual for official year-end reporting. Smaller groups may run modified accrual through the year and convert to accrual at year-end. Fund Accounting: Operating, Reserve, and Special Assessment Funds Here is the part most guides skip. HOA accounting relies on fund accounting. That means you track money in separate buckets, not one big pool. Each fund has its own purpose and its own balance. Mixing those funds is the cardinal sin of association finance. Operating fund: day-to-day costs like utilities, landscaping, and management. Reserve fund: long-term repairs and replacements, such as roofs and roads. Special assessment fund: money collected for one specific project. Keep these funds in separate bank accounts. Title each account clearly. Watch federal deposit insurance limits, since large reserve balances can exceed the insured amount at one bank. Never borrow from reserves to cover operating shortfalls without a documented board vote. Commingling funds erases trust and breaks compliance. Worried your funds are mixed? Our clean up my books team separates them fast. The 6 Essential HOA Accounting Financial Statements Every month, the board should review a financial packet. These six statements tell the whole story. Reading them is the heart of good HOA accounting oversight. Each one answers a different question about your money. Here is what each report covers. Statement What it shows What to check Balance Sheet Assets, liabilities, fund balances Reserve balance and prepaid dues Income Statement Budget versus actual Large variances Cash Flow Statement Cash movement Whether cash covers bills General Ledger Every transaction Odd or miscoded entries Accounts Receivable Who owes and how late Aging buckets Accounts Payable What the HOA owes Duplicate payments Balance Sheet The balance sheet shows what the association

You closed three deals last quarter. So why does tax season still feel like an ambush? Most agents fall into the same trap. Commission lands in one account. Gas, signage, and listing fees vanish into the same pile. By April, nobody knows what was profit and what was just cash moving through. Strong bookkeeping for real estate agents fixes this. It splits business from personal. It captures every write-off. It shows what you actually earned. This guide breaks down the system, the tax rules, and the tools that keep your numbers clean all year. What Is Bookkeeping for Real Estate Agents? Bookkeeping for real estate agents is the practice of recording, categorizing, and reconciling every dollar that flows through your business. You are not a salaried employee. You are a self-employed contractor who receives a 1099 form. That changes everything about your money. Good real estate bookkeeping tracks commissions, broker splits, marketing spend, mileage, and your quarterly tax set-aside. Here is the part people confuse. Bookkeeping for real estate agents records what happened. Accounting interprets it and plans ahead. Bookkeeping: logging income, sorting expenses, matching bank statements. Accounting for realtors: reading the reports, lowering your tax bill, planning growth. Default method: nearly every agent uses cash basis, where income counts when it hits your account. Want this handled for you? Explore our bookkeeping service built for agents. Why Bookkeeping for Real Estate Agents Matters More for Realtors Than Most Businesses Real estate income is lumpy. You might earn nothing for two months, then close two homes in one week. No employer withholds your taxes. Your expense list is long and deduction-heavy. That mix makes bookkeeping for real estate agents harder than running a simple storefront. It also makes it more valuable. The stakes are real. The National Association of Realtors reports that the median gross income for its members sits in the low five figures for newer agents and climbs sharply with experience. Disorganized books eat into that income through missed deductions and penalty risk. Clean books help you in three concrete ways: Tax safety: your Schedule C holds up under scrutiny. Loan approval: lenders want clear profit records before they fund your own mortgage. Cash flow visibility: you see slow seasons coming and budget through them. Tax season feels different when your books are clean. See how our tax services protect agents at filing time. How to Set Up Your Real Estate Bookkeeping System (Step by Step) A simple system beats a fancy one you never use. Follow these five steps in order. Each one removes a future headache. Done right, bookkeeping for real estate agents takes a few minutes a week instead of a panicked weekend in April. Here is the build, step by step. 1. Open a dedicated business bank account and card Mixing personal and business money is the number one mistake. Open a separate checking account and a business card. Run every commission and expense through them. Pay yourself by transferring a set amount to your personal account. This gives you a clean paper trail the Internal Revenue Service respects. 2. Choose your accounting method You pick between cash basis and accrual basis. Cash basis records income when received and expenses when paid. Accrual records them when earned or billed. Almost all agents use cash basis because it is simple and matches how commission actually arrives. 3. Pick your tools Match the tool to your deal volume. A spreadsheet works for very low volume. Software fits most active agents. Outsourcing fits high earners who value their time. We cover this choice in detail below. 4. Build your chart of accounts This is the step most generic guides skip. Your chart of accounts is the list of buckets you sort money into. A real estate-specific list captures deductions others miss. Income accounts Expense accounts Commission income Marketing and advertising Referral income received Multiple Listing Service and association dues Bonus and incentive income Vehicle and mileage Errors and omissions insurance Brokerage desk fees Continuing education 5. Set a weekly and monthly routine Categorize transactions weekly. Reconcile your bank account monthly. Review your profit and loss report every quarter. That rhythm keeps your bookkeeping for real estate agents current instead of buried. Not sure your current setup is clean? Our clean up my books service fixes messy records fast. How to Track Commission Income Correctly Commission tracking trips up new agents. The check you see is rarely the income you keep. You must record the full deal and then the split. Good bookkeeping for real estate agents gets this right by separating gross from net. Watch the difference between these two numbers. Gross commission income: the total commission on the deal. Net commission: what lands in your account after the broker split. Here is a worked example. You sell a home for $500,000 at a 3% commission. That is $15,000 in gross commission income. Your broker takes a 30% split, so $4,500 goes to the brokerage. You record $15,000 as income and $4,500 as a commission expense. Your net is $10,500. When your broker sends the 1099-NEC form in January, match it to your books so the totals agree. Team leaders carry extra steps. You may pay referral fees out, track caps, and split with buyer agents. Record each piece on its own line. Commission splits get complex on teams. Our outsourced accounting keeps every split clean. Real Estate Agent Tax Deductions: What You Can Write Off Deductions are where bookkeeping for real estate agents pays for itself. Every business dollar you track is a dollar that can lower your taxable income. Studies of self-employed filers consistently show that vehicle and home office costs rank among the most missed write-offs. Track them and you keep more. These are the categories that matter most for agents. Vehicle and mileage You drive constantly. The 2026 standard mileage rate is 72.5 cents per mile for business use. You choose between the standard mileage method and the actual expense method, but

A customer buys a $90 pair of shoes. Two months later, the money vanishes from your account. No warning. No refund request. Just a chargeback. If your books still show that sale as clean revenue, your numbers are now wrong. This is where chargeback accounting earns its place. Chargeback accounting is the way you record, reconcile, and track disputed card payments correctly. It is not a simple refund. It pulls in third parties, fees, and long timelines. Get it wrong and your profit, taxes, and compliance all suffer. This guide shows you how to do it right. What Is a Chargeback? So what does chargeback mean in plain terms? A chargeback is a forced payment reversal. The cardholder disputes a charge with their issuing bank. The bank pulls the money back from you. You do not approve it. You only react to it. Here is the simple flow. The cardholder files a dispute. The issuing bank reviews it. The bank reverses the funds through the card network. The money leaves your account, and a fee comes with it. People often confuse a chargeback with a refund. They are not the same thing. Chargeback Versus Refund Who starts it: You start a refund. The customer starts a chargeback through their bank. Who controls it: You control a refund. The bank controls a chargeback. The fee: A refund has no penalty fee. A chargeback adds a fee, often $15 to $100. The timeline: A refund clears in days. A chargeback can drag on for months. Related: see how our team handles ecommerce bookkeeping so disputes never slip through your books. What Is a Chargeback In Accounting and Why Is It Different? Now to the core idea. What are chargebacks in accounting? Chargeback accounting is the recording and reconciliation of these reversed payments inside your financial records. The chargeback meaning in accounting goes beyond a single line entry. It tracks money that moved, fees that hit, and disputes that may still flip. Standard bookkeeping assumes a sale is final. Chargeback accounting assumes a sale can break later. That gap is the whole problem. A chargeback is not a clean sale reversal. Three things make it messy. There are extra parties involved. There are delayed timelines. And there are several cost layers, not one. Generic bookkeeping often dumps a chargeback into “refunds.” That single mistake hides fees, distorts revenue, and breaks your reconciliation. Good accounting for chargebacks keeps each piece visible. Related: our outsourced bookkeeping service separates disputes from refunds by default. Why Chargeback Accounting Is So Difficult Chargeback accounting is hard for reasons most owners never expect. The biggest one is time. A dispute window can run from 120 days to a full year. So a chargeback can land in a period long after the sale closed. That pulls the loss into a prior accounting period and forces a restatement. Volume is also unpredictable. One bad month of ecommerce chargeback fraud can spike your numbers and wreck your forecast. Then there are the cost layers. You lose the sale amount. You lose the product. You pay a fee. You spend staff hours fighting it. None of that fits neatly into a refund line or a cost of goods sold line. Processors and acquirers also report disputes differently. Stripe shows it one way. PayPal shows it another. Matching them by hand is slow and error prone. Related: read our case study on cleaning up a Shopify seller’s books after a chargeback spike. The Chargeback Accounting Lifecycle and Where the Money Moves To record disputes well, you must know where the money sits at each stage. Every stage has a fee trigger and an accounting trigger. The Stages Filing: The customer disputes. The funds are held or pulled. A chargeback fee posts. Representment: You fight back with evidence. No new money moves yet. Reversal: You win or you lose. Funds return to you, or the loss becomes final. Pre-arbitration: The issuer pushes back again. More fees may apply. Arbitration: The card network decides. The losing side pays the arbitration cost. Your decision to accept or fight changes the books. If you accept, you book the loss now. If you fight, you hold the amount in a receivable until the outcome lands. That outcome may fall in a different month, which creates a multi-period reconciliation task. Related: our accounting reconciliation service tracks each dispute across periods so nothing gets lost. How to Record Chargebacks: The 3 Methods (With Journal Entries) This is the part most guides skip. There are three clean ways to record a chargeback. Pick one and apply it the same way every time. Method 1: Contra-Revenue (Immediate Reduction) You treat the dispute like a sales reversal right away. Best for small, low-volume sellers. Account Debit Credit Chargeback Expense (contra-revenue) $XX Cash / Bank $XX Then record the fee: Account Debit Credit Chargeback Fees (operating expense) $XX Cash / Bank $XX Method 2: Accounts Receivable (“Chargebacks Receivable”) You hold the disputed amount as a receivable while you fight. Best for sellers who contest often. When the chargeback is filed: Account Debit Credit Chargebacks Receivable $XX Cash / Bank $XX If you win and funds reverse: Account Debit Credit Cash / Bank $XX Chargebacks Receivable $XX If you lose, you write it off: Account Debit Credit Bad Debt Expense (chargeback loss) $XX Chargebacks Receivable $XX Method 3: Hybrid (Materiality-Based) You mix both. Small disputes hit contra-revenue at once. Large or contested disputes sit in a receivable until they settle. This is the method most growing brands use. Related: our ecommerce accounting software set up these journal templates inside your software. Worked Example: One Chargeback From Sale to Write-Off (With Real $ Numbers) Let me walk one dispute through the whole path. Say a customer buys a product for $84. Step 1, the original sale: Account Debit Credit Cash / Bank $84 Sales Revenue $84 Step 2, the chargeback is filed (Method 2). The bank pulls $84 and charges a $25 fee. Account Debit Credit Chargebacks

You made your first online sale. Congratulations. Now comes the part nobody warns you about. Forty-five states plus Washington D.C. charge ecommerce sales tax. That covers over 12,000 tax jurisdictions watching your revenue. Miss one threshold and you could owe back taxes, interest, and penalties. One Shopify seller in Texas owed $42,000 in back taxes after ignoring nexus rules for two years. The rules changed in 2018. Remote sellers can no longer rely on physical borders for protection. This guide covers nexus, state rules, filing steps, and automation tools for 2026. What Is Ecommerce Sales Tax and How Does It Work? Ecommerce sales tax is not a special category of tax. It is the standard state sales tax applied to online purchases. The seller collects the tax from the buyer at checkout. Then the seller sends it to the state. You act as a temporary custodian. You hold the money and pass it on. Forty-five states and Washington D.C. impose sales tax on online sales. Five states do not. These are New Hampshire, Oregon, Montana, Alaska, and Delaware. Sellers call these the NOMAD states. If your buyers are in the other 45 states, sales tax rules apply to you. The challenge is scale. There are over 12,000 taxing jurisdictions across the country. Each one can have its own rate, rules, and product exemptions. Managing this manually is nearly impossible at any meaningful revenue level. Sales Tax vs Use Tax: What Is the Difference? Use tax is the companion to sales tax. When a buyer makes an out-of-state purchase and the seller does not collect sales tax, the buyer technically owes use tax to their own state. Businesses also owe use tax on taxable equipment and supplies bought without tax applied. States created use tax to protect local retailers competing with out-of-state online sellers. Related: How to handle multi channel ecommerce bookkeeping and sales tax compliance The South Dakota v. Wayfair Ruling That Changed Ecommerce Taxation Before 2018, a state could only tax sellers with a physical presence there. That meant stores, warehouses, or employees in that state. Online sellers with no physical presence often collected nothing. In 2018, the United States Supreme Court ruled on South Dakota v. Wayfair. The decision changed everything for online selling and ecommerce taxation. States can now require remote sellers to collect and remit sales tax based on sales volume alone. No physical presence needed. This ruling created what we call economic nexus. Every modern ecommerce sales tax obligation you face today flows from this decision. Understanding it is the foundation of staying compliant. Related: Explore how ecommerce accounting software syncs sales tax across different state. Sales Tax Nexus Explained: Physical, Economic, Click-Through and Affiliate Nexus is the connection between your business and a state that creates a ecommerce sales tax obligation. There are four main types. Each one can trigger the duty to register, collect, and file in that state. Physical Nexus You have physical nexus when you have a store, warehouse, office, employee, or inventory in a state. Storing products in an Amazon FBA fulfillment center in Ohio creates physical nexus in Ohio. Many sellers discover this surprise only during an audit. Economic Nexus Economic nexus is triggered by your sales volume alone. Most states set the threshold at $100,000 in sales or 200 transactions in a calendar year. Once you cross that line in a state, you must register there and begin collecting sales tax for ecommerce sales. Click-Through and Affiliate Nexus Some states create nexus through referral relationships. If an in-state blogger or influencer promotes your store and earns a commission, some states treat that as nexus. Thresholds can be as low as $10,000 in referred sales per year. Review your affiliate and influencer programs carefully. Economic Nexus Thresholds by State for 2026: What Changed This Year The most common threshold remains $100,000 in sales or 200 transactions. However, the transaction count rule is disappearing fast. Over 16 states have now eliminated the 200-transaction threshold. This is one of the biggest changes in ecommerce sales tax sellers in 2026. Key 2026 updates: Illinois: Dropped the transaction count threshold on January 1, 2026 Kentucky: Drops the transaction count threshold on August 1, 2026 Utah: Dropped the transaction count threshold in July 2025 Alaska: Dropped the transaction count threshold in January 2025 High-threshold states set a much higher bar. California, Texas, and New York all require $500,000 in sales before economic nexus applies. Smaller sellers may not yet have nexus in these states. Check both the current and previous calendar year when measuring your totals. Ecommerce Sales Tax by State: Key Reference Table (2026) State Sales Threshold Transaction Threshold Sourcing Shipping Taxable California $500,000 Eliminated Modified Origin Taxable Texas $500,000 Eliminated Destination Taxable New York $500,000 100 transactions Destination Exempt (see note) Florida $100,000 Eliminated Destination Taxable Illinois $100,000 Eliminated (Jan 2026) Destination Taxable Washington $100,000 Eliminated Destination Taxable Ohio $100,000 200 transactions Destination Taxable Georgia $100,000 200 transactions Destination Taxable Pennsylvania $100,000 Eliminated Destination Taxable Arizona $100,000 Eliminated Destination Taxable Michigan $100,000 200 transactions Destination Exempt Colorado $100,000 200 transactions Destination Taxable Massachusetts $100,000 Eliminated Destination Taxable Nevada $100,000 200 transactions Destination Taxable Tennessee $100,000 Eliminated Destination Taxable Utah $100,000 Eliminated (Jul 2025) Destination Taxable Alaska $100,000 Eliminated (Jan 2025) Destination Taxable (local) New Hampshire No tax N/A N/A N/A (NOMAD state) Oregon No tax N/A N/A N/A (NOMAD state) Note: New York shipping is generally exempt on non-taxable items. Always verify product-specific rules. Alaska has no state sales tax but many local jurisdictions do. Related: GATP Solutions provides up-to-date multi-state sales tax compliance support How to Register, Collect, Report, and File Ecommerce Sales Tax Step by Step Once you have nexus in a state, you must register before making your first taxable sale. This is the full workflow for ecommerce sales tax compliance. Step 1: Register for a Sales Tax Permit Go to each state’s Department of Revenue website. Apply for a sales tax permit using your Employer Identification Number.

Your dental practice billed $50,000 last month. But only $31,000 landed in your bank account. Where did the rest go? Insurance adjustments quietly reduced your revenue. Uncollected patient balances piled up. Write-offs went unrecorded. This gap is not a billing problem. It is a dental bookkeeping problem. Poor financial records inflate your overhead, hide your true profit, and put you at direct IRS audit risk. Whether you run a solo practice or a growing multi-location clinic, clean books are the foundation of every profitable decision you will make. This guide tells you exactly how to build them. What Is Dental Bookkeeping and Why Is It Different? Dental bookkeeping is the process of recording, tracking, and reconciling all financial transactions in a dental practice. This includes patient payments, insurance reimbursements, lab fee costs, payroll, write-offs, and supply expenses. It sounds simple. It is not. The core problem is that billed revenue is not the same as collected revenue. A general bookkeeper records income when a service is invoiced. In a dental practice, that produces a dangerously inaccurate picture of your cash. The Production vs. Collections Problem in Dental Bookkeeping When you complete a procedure, you produce revenue. But production and collections are two completely different numbers. Insurance companies pay a fraction of the billed amount. Patients miss payments. Contractual write-offs reduce your net income further. Without tracking collections separately from production, you will always overestimate what your practice actually earns. Learn how GATP Solutions structures dental-specific bookkeeping. Why Dental Bookkeeping Matters More Than You Think Most dentists focus on chair time and patient volume. The books get pushed aside. This is one of the most expensive habits in the industry. Here is what poor bookkeeping for dentists actually costs you: Cash flow blind spots. You feel profitable. Then a $15,000 payroll run hits and your account runs dry. Overhead creep. The healthy overhead range for a dental practice is 60 to 65 percent. Without monthly tracking, it climbs silently to 75 percent or higher. Tax overpayment. Misclassified expenses mean you pay more tax than you legally owe. IRS audit risk. Inconsistent revenue reporting is a red flag the IRS actively looks for in dental practices. Lower practice valuation. Buyers and lenders want clean, accurate financials. Messy books kill deals at the finish line. At GATP Solutions, we guarantee on-time financial report delivery. Monthly, quarterly, and annual reports are always delivered on schedule. If we miss a compliance deadline due to our fault, we pay a 50 percent fee. That is our commitment to your practice. See GATP Solutions dental accounting services. Dental Bookkeeping vs Standard Bookkeeping: 7 Key Differences Standard bookkeeping tools were built for simple revenue models. Dental bookkeeping practices are not simple. Here are the seven areas where dental office bookkeeping requires a completely different approach: Area Standard Bookkeeping Dental Bookkeeping Revenue tracking Invoice date Collection date Insurance Not applicable Reimbursement plus write-offs Cost of goods Product cost Lab fees plus dental supplies A/R aging Basic tracking Insurance vs. patient split KPI reporting Revenue and expenses Collection ratio and overhead Depreciation Standard method Dental equipment-specific Chart of accounts Generic categories Dental-specific sub-accounts A general bookkeeper will plug your numbers into QuickBooks and call it done. A dental-savvy accountant will structure your books to reflect how your practice actually earns money. How Dental Insurance Reimbursement Affects Your Books This is the most misunderstood part of accounting for dental practices. Most practices record this wrong. Here is a real-world example that shows every entry clearly. Real Example: A $2,000 Crown Procedure Gross production billed: $2,000 Insurance payment received: $1,200 Contractual write-off adjustment: $300 Patient portion collected: $500 Net revenue recorded in books: $1,700 How Each Entry Hits Your Books Record gross production of $2,000 as billed revenue. Post the insurance payment of $1,200 as income received. Apply the $300 write-off as a contra-revenue adjustment (not an expense). Record the $500 patient payment as income collected. Close the remaining balance to zero. Most practices skip the write-off entry entirely. This overstates revenue and distorts your overhead percentage in one move. See how GATP Solutions handles medical practice accounting. The Financial Statements and KPIs Every Dental Practice Must Track A standard profit and loss statement is not enough for dental practice accounting. You need dental-specific financial structure plus key performance indicators that tell the real story of your practice’s health. Must-Track Dental KPIs Collection ratio: Collections divided by production. Target is 98 percent or higher. Overhead percentage: Total expenses divided by collections. Target is 60 to 65 percent. Production per provider: Tracks each dentist’s individual revenue contribution. Accounts receivable aging: How long outstanding balances sit unpaid. Less than 10 percent should exceed 90 days. These numbers tell you what your bank statement never will. Run them every single month without exception. Building a Dental Chart of Accounts That Actually Works The default QuickBooks or Xero chart of accounts was not built for dental practices. It groups all revenue together and provides no structure for lab fees, write-offs, or insurance adjustments. A proper chart of accounts for dental bookkeeping includes: Income Accounts General dentistry collections Specialty service collections (orthodontics, implants, oral surgery) Insurance collections Patient out-of-pocket payments Cost of Goods Sold Lab fees Dental supply costs Implant and prosthetic materials Overhead Categories Clinical payroll Administrative payroll Rent and occupancy Equipment leases Marketing and patient acquisition A well-structured chart of accounts is the single most important foundation in dental bookkeeping. Without it, every report you run is built on a flawed base. Cash vs Accrual Accounting: Which Should Your Dental Practice Use? Here is a direct answer. Most practices under $5 million in annual collections can use cash-basis accounting. It is simpler and fully IRS-compliant at that level. But here is the real problem with cash basis for dental practices. If you carry significant accounts receivable, cash basis hides your true financial position. You can show a profitable month on paper while $40,000 in unpaid insurance claims sits aging untouched. Quick Comparison Cash basis: