Case Study 23 – Built An Accounting Department

How To Build An Accounting Department For A $20 Million Dollar Dental Company

A dental company with 20 locations, about 500 employees and growing, effectively had no accounting department.  Various tax agencies were being ignored and there were the makings of a potential massive regulatory and financial disaster brewing. No business controls in place with a potential significant amount of money lost in employee theft and erroneous vendor payments for expensive dental equipment. All documentation was thrown away.

Saved the company over $50,000 in annual illegitimate credit card charges, began monthly accurate financial statements which led to a more realistic picture of profitability, and saved a potential of over $1,000,000 in fines and penalties.

Upon examination of the financial records of the company, I determined that the Quickbooks system needed to be rebuilt from scratch. So I started by designing the chart of accounts and populating the balances for all the accounts in the new Quickbooks Enterprise system while documenting standard operating procedures for the current employees to follow for correct transaction entries. Additionally, I began bookkeeping training for the employees to understand their work. Reconciled and closed out the previous system to the best possible scenario, given there were no documents to recreate anything from.  Created procedures for each location to do daily reporting of claims and expenses. These reports were reconciled against the Dentrix practice management system and entered into the accounting system daily. This also implemented proper control of all the petty cash at each location. Canceled all 100 American Express cards and transitioned to the SmartData system, with Chase Bank issuing 40 Visa cards with controls on what transactions are approved and not approved. Fully documented and trained employees on bookkeeping for Accounts Payable and Accounts Receivable, as well as credit card and bank reconciliations and asset and liability management, with a digital document filing system. In the process discovered, numerous bad practices with the use of vendors, human resources, and asset tracking. Each situation uncovered new problems to resolve. One major one was that Dentists were working in new locations and billing through existing locations, which could have potentially caused a loss of licensing. Once the accounting department was built and the bookkeeping relatively stabilized in about seven months, we transitioned to NetSuite to more appropriately handle the accounting needs of a company approaching 30 locations and over $30 million in collected revenue.