The day sheet is not the deposit
Practice-management software (ClearDent, ABELDent, Dentrix) reports production: dentistry performed, priced at your fee schedule. The bank shows collections: insurer assignment payments batched across many patients and dates, CDCP remittances from Sun Life on the plan's own fee grid, card-terminal deposits net of processing fees, and the occasional patient cheque. A bookkeeper who records deposits as revenue is not keeping books; they are keeping a bank feed.
We reconcile three layers every month: production per the day sheets, collections per the PMS, and cash per the bank. The gaps between them are the useful part. They surface insurer write-downs, unposted terminal batches, and patient balances quietly aging past 60 days.
| Money coming in | What the books must catch |
|---|---|
| Insurer assignment (EFT) | One deposit covers many patients and days; each claim clears against the patient ledger, not the lump sum |
| CDCP payments | Sun Life remits on the CDCP fee grid, which rarely matches the provincial fee guide line for line, so per-claim adjustments are routine |
| Card terminals | Deposits arrive net; processing fees get their own expense line instead of disappearing |
| Whitening and retail | Taxable sales, tracked separately because they count for HST registration while clinical revenue does not |
Prepaid treatment plans and ortho cases paid up front create patient credit balances, which are liabilities until the dentistry is delivered. Booked as revenue, they flatter this year, starve the next one, and hide what you would owe if a plan were cancelled. We carry them as credits and reconcile the credit-balance report at each close.
Hygiene payroll decides the margin
Hygiene is usually the largest wage line and the only one tied directly to a production column, so it gets its own treatment. Inside our End-to-End Accounting engagement we run the full payroll: T4 hygienists, assistants and admin staff with CPP, EI, vacation pay and statutory holidays handled to ESA rules, and source deductions remitted on schedule.
Two Ontario specifics matter. The Employer Health Tax exemption covers the first $1,000,000 of Ontario payroll for private employers and is shared across associated corporations, so a second location can push you over sooner than expected. And associate dentists are usually not payroll at all: they invoice the practice a percentage of their collections as independent contractors, an arrangement that only holds up when the agreement, the invoicing and the day-to-day facts all support it.
Every month-end we report hygiene wages against hygiene production. When that ratio drifts, the whole practice margin drifts with it, and you want to see it in weeks, not at year-end.
Exempt revenue makes every invoice 13% heavier
Core dental services are HST-exempt, so the practice claims no input tax credits. The 13% on rent, Henry Schein or Sinclair Dental orders, lab fees and software is not recoverable; it is simply part of the cost. Budgets, fee planning and the overhead ratio all have to be built on HST-inclusive numbers, a discipline generic bookkeeping misses because in most industries the HST washes out.
The same logic follows equipment into the fixed-asset register. HST on a new chair, sterilizer or CBCT unit folds into its capital cost and depreciates with it: Class 8 at 20% declining balance for most operatory equipment, Class 50 for computers, Class 13 for the leasehold build-out over the lease term. We keep the register by operatory, so you know what each room carries and what replacing it really costs.
One engagement, day sheet to T2
The stack is deliberately boring: QuickBooks Online as the ledger, Dext capturing supplier invoices, Plooto running payment approvals, and a chart of accounts split by department so hygiene, dentist production and retail each show their own line. We also set a day-end routine with your front desk, balancing the day sheet to the terminals before anyone leaves, so month-end starts clean instead of starting with archaeology.
Because bookkeeping, payroll, reporting and tax filing sit under one roof, year-end is a handoff rather than a project. The file flows straight into the corporate tax return, and if the CRA opens a payroll or HST question, CRA Audit & Review Support works from records we already know. We run this monthly rhythm for practices across Mississauga and the GTA, and the deliverable is short on purpose: overhead ratio, hygiene share, collections aging, cash position, and anything that moved.
Source: Ontario — Employer Health Tax.
