The accountant for dentists who want profit, not just production
Lab costs, PPO write-offs, associate splits, per-location P&L. Dental accounting has moving parts a general CPA is not tracking. We track all of them, every month.
A 4-minute test your accountant hopes you skip.
At a glance
TL;DR — What is Dental Accounting?
Dental practice accounting is the financial management discipline built for dental and orthodontic practices — tracking PPO write-offs, lab costs by vendor, and per-location profitability — typically used by dentist-owners with $600K–$5M in annual collections who need more than a monthly P&L to understand where their money is going. Sorso is an accounting and bookkeeping firm that does this for dental practices across the US. Accounting starts at $2,000 a month, month-to-month after onboarding, with a 45-day money-back guarantee; tax preparation and filing stay with your CPA.
Industry Context
How Dental Practices Actually Run Their Books
Dental accounting looks deceptively simple from the outside: you collect from patients and insurance, you pay for labs and supplies, and what's left is profit. In practice it is messier. Commercial dental plans allowed about 72 percent of dentists' list prices in 2017 claims studied by ADA Health Policy Institute economists, so every $100,000 of in-network production at full fee becomes roughly $72,000 before any collection problem, and that gap rarely shows up cleanly on a generic chart of accounts. Lab fees get lumped under 'supplies' instead of being tracked per case. Associate compensation, usually a percentage of the associate's own production, often shows up as a single payroll line with no link back to who produced what.
Dentist-owners care about a different set of numbers than retail business owners. They want to know overhead percentage by location, production-to-collection ratio per provider, hygiene reappointment rates that translate to recurring revenue, and the true cost per patient visit including indirect overhead. A dental-aware accounting setup tracks lab costs by case type, separates implant and crown work from operative procedures, and reconciles practice management software production reports against what actually hits the bank.
Is This Right for You?
This service is for dental practice owners who recognize these problems:
Need strategic financial leadership? Our Fractional CFO service for dental practices may be a better fit.
What We Often Find
Common Accounting Mistakes in Dental Practices
These are common mistakes worth checking for in the books of a dental practice.
01
Treating PPO write-offs as a single line item
Most practices report adjustments as one number, which hides the one or two PPO plans that write off far more than the rest. Without per-plan visibility, you cannot make informed decisions about which contracts to renegotiate or drop.
02
Lumping lab costs into general supplies
Track lab fees as their own line, by case category (crown, denture, partial, ortho appliance). When labs are buried under supplies, owners cannot see what they lose by sending a case to a high-cost lab when a mid-tier lab would do.
03
Booking associate compensation as a single payroll number
In the 2022 Dental Economics and DentalPost salary survey, 70 percent of associates in private practice said their pay is a percentage of production. If your books just show 'wages,' you cannot tell whether your associate is actually making money for you, breaking even, or losing money once you account for assistant time, lab work, and supplies attributable to their cases.
04
Not separating hygiene production from doctor production
Dental Economics' 2015 hygiene benchmarks put the hygiene department at 25 to 35 percent of gross practice production. When hygiene is not tracked separately, you cannot calculate hourly hygiene production or spot under-coded recall visits.
05
Ignoring the difference between production and collections
Producing $2M and collecting $1.4M is not the same as a $1.4M practice. Booking by production overstates revenue and masks adjustments. We book on a collections basis with a separate production tracker so both numbers are visible.
The Numbers That Matter
Key Accounting Metrics for Dental Practices
Overhead Ratio
What we look for: 55 to 60 percent for a well-run GP, lower for specialty practices
- Total operating expenses divided by collections. The single most important profitability metric in a dental practice.
Lab Cost as Percent of Collections
- Total lab fees divided by net collections, ideally tracked per case category.
Production per Operatory per Hour
- Revenue produced divided by chair-hours scheduled. Measures clinical efficiency and scheduling.
Hygiene Production per Hour
What we look for: At least about $141 of production per hygiene hour (Sorso estimate: three times the $47.16 BLS median hygienist wage)
- Hygiene-only collections divided by hygiene chair hours. Should include prophy, perio, exams, and any ancillary hygiene services.
Associate Compensation Ratio
- Associate pay including benefits as a percentage of associate-produced collections.
Collections to Production Ratio
- Net collections divided by gross production. Reveals adjustment, write-off, and collection efficiency.
Software & Vendors
EHR, PM, and Vendor Reality for Dental Practices
Dental practices typically run on Dentrix, Eaglesoft, Open Dental, Curve, or one of a handful of cloud-native platforms like Dentrix Ascend or Denticon. Each system exports production, collection, and adjustment data differently, and the level of granularity available in standard reports varies widely. Open Dental gives you the cleanest export options; Eaglesoft requires more manual extraction. Practices using Dental Intelligence, Practice by Numbers, or Jarvis Analytics already have a layer of analytics on top of their PMS, but those tools rarely reconcile back to the general ledger. The accounting workflow needs to bridge that gap so the production reported in the PMS matches what is recognized as collections in QuickBooks or Xero.
Lab vendors deserve scrutiny. Many practices send work to several labs without ever running a true cost-per-case comparison across them. Get per-case prices for routine crowns from a national lab such as Glidewell or Modern Dental and compare them with what your boutique lab charges for comparable work. Supply contracts with Henry Schein, Patterson, or Benco often have rebate structures that go uncollected, and a group purchasing organization may cut supply costs further if the practice is large enough to qualify.
What's Included
How We Work With Dental Practices
Dental-specific accounting that goes beyond reconciliation.
Lab & Supply Cost Tracking
- •Per-case lab cost analysis by procedure type
- •Supply cost benchmarking against published figures for comparable practices
- •Vendor comparison and consolidation opportunities
Multi-Location P&L Separation
- •Location-specific revenue and expense tracking
- •Shared overhead allocation methodology
- •Per-location profitability dashboards
- •Transfer pricing for shared resources
Provider Production & Compensation
- •Production-to-collection reconciliation per provider
- •Associate compensation modeling (percentage vs salary vs hybrid)
- •Hygienist production tracking per hour worked
PPO Write-Off Accounting
- •Write-off tracking by insurance plan
- •Effective reimbursement rate per procedure per payer
- •Fee schedule analysis and adjustment recommendations
- •Impact modeling for PPO contract changes
Results
Results in this example
| Metric | In this example |
|---|---|
| Annual lab savings | $50K–$70K range through vendor consolidation |
| Revenue recovered | Six figures annually from coding corrections and payer renegotiations |
| Overhead reduction | A double-digit-point drop over roughly two to three quarters |
Illustrative Scenario
What This Looks Like In Practice
A multi-provider dental group with two locations and a GP plus pediatric mix. Overhead had climbed into the low 70s as a percentage of revenue over several years of steady growth. The owner felt busier than ever while the bank balance moved the other way.
What the review found:
- •Lab costs running close to double the typical benchmark because three labs were in rotation with no cost comparison
- •PPO write-offs averaging in the high 30s but ranging from the low 20s to the low 50s across plans, with the highest-write-off plan representing a meaningful share of patients
- •The second location generating materially less revenue while carrying higher overhead because of duplicate staffing
- •Hygiene coding the large majority of perio patients as prophylaxis instead of the appropriate perio maintenance code
Representative results
$50K–$70K range through vendor consolidation
Annual lab savings
Six figures annually from coding corrections and payer renegotiations
Revenue recovered
A double-digit-point drop over roughly two to three quarters
Overhead reduction
The takeaway
The lesson from this example: once lab vendors get consolidated and PPO write-offs get measured plan by plan, the overhead story usually looks very different from what the P&L suggested.
Common Questions About Accounting for Dental Practices
How much does dental accounting cost?+
Accounting starts at $2,000 a month. Onboarding is a one-time $3,000 to $9,000, depending on how much cleanup the books need. After that the engagement is month-to-month, with a 45-day money-back guarantee.
Do you work with dental practices in my state?+
Yes. We work with dental practices across the US. The work runs on your accounting, billing and payroll systems, so where the practice is does not change it.
Do I need a dental CPA or a dental accountant?+
Both, for different jobs. A dental CPA prepares and signs the tax return. An accountant for dentists runs the books every month: lab and supply ratios, PPO write-offs, associate splits, a P&L per location, and a close a buyer could audit. Sorso is the second one. We are not a CPA firm, and we partner with dental CPAs on tax so nothing falls between the two.
Is this dental bookkeeping, or more than that?+
Bookkeeping is the first layer: every transaction categorized and reconciled each month. Accounting for dental practices adds the reporting that tells you what to change, such as production against collections, hygiene share, and overhead by category, with the numbers explained rather than just delivered.
How is dental accounting different from general small business accounting?+
Dental has unique categories (lab costs, supply costs, PPO write-offs, associate compensation splits) that general accountants lump together. We track each one separately so you actually know where your money goes.
Can you handle multi-location dental practices?+
Yes. We set up location-specific P&Ls with proper overhead allocation so you can see exactly which location is profitable and which one is subsidizing the other.
How do you handle associate compensation tracking?+
We reconcile production reports from your practice management system against actual collections and calculate true compensation ratios. Most practices discover a significant gap between what they think they are paying and what it actually costs.
Do you integrate with Dentrix, Eaglesoft, or Open Dental?+
We work with data exports from all major dental PMS platforms. We pull production, collection, and adjustment reports monthly and reconcile against your accounting.
What is your experience with dental-specific tax planning?+
We work with your CPA on tax strategy. Our role is giving them clean financials with proper dental categorization (equipment depreciation, CE deductions, lab costs) so they can do their job better.
How quickly can you get our books caught up if we are behind?+
Most dental practices are current within 4–6 weeks of onboarding. If you have a backlog, we quote that separately during onboarding so there are no surprises.
Don't pay for reports. Pay for progress.
Take the 4-minute financial assessment—and find out if your books are helping or hurting your dental practice.
The test your accountant hopes you skip.
Sources
Figures on this page come from these published sources. Rows marked Sorso estimate are our own arithmetic on them.
- Henry Schein One, 2026 Catalyst Index (collection rate, case acceptance)
- Catalyst Index full report: definitions and full results
- Health Services Research, 2021: commercial dental plan discounts (2017 claims)
- ADA Health Policy Institute, DSO affiliation 2024 (XLSX)
- FOCUS Investment Banking, Dental Practice EBITDA Multiples 2026
- McLerran & Associates, DSO Dental Practice Valuation Multiples: 2026 Guide
- Dental Economics, hygiene department benchmarks (2015)
- BLS, Dental Hygienists (May 2025 wages)
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By state
Dental Practices accounting and CFO support, by state
State-level tax, payer, and regulatory context shapes what “good” looks like for dental practices practices. The pages below walk through each state's specifics.