When it comes to running a business, there has to be a clear system to account for income properly, and it’s no different for dental practices. If you want to impact practice success, you’ll need to track incoming revenue. That’s why running the daily deposit report is important to help you make sure your revenue is well managed.
Because money is coming in and out from so many sources, it can become difficult to track the numbers. And unfortunately, when this system of checks and balances isn’t organized, you’re not only unaware of the money you could be owed or owe a patient, but you're missing out on theft prevention - a way to ensure all your money is going into your bank account, and not being taken without your awareness.
Dentists who work with us at Dental ClaimSupport receive a daily deposit report at the end of each day from their remote team member. The daily deposit report lists the total amount deposited for each type of payment, whether cash, check, credit card, or electronic funds transfer (EFT).
The deposits should match the day’s payments received - and the daily deposit report empowers you to notice any discrepancies. Even if you do not outsource your billing tasks, we recommend every dental practice checks payments against deposits at the end of each day.
In this article, you will learn about the importance of creating this report as part of an organized billing system, making sure you have full control over your revenue. We will walk you through three essential benefits to running this report regularly for financial accountability and to keep track of every dollar you’ve earned.
What is a daily deposit report?
It’s in the name of this report how often it should be run, daily! Your daily deposit report consists of all different forms of payment made to your office on that workday. Although there are only 2 main entities that pay your office – patients, and insurance companies – payments can still come in many forms.
Patient payments can come via credit cards, patient checks, and cash. And insurance payments can come via virtual credit cards, insurance checks, and direct deposits (or electronic funds transfers, EFTs).
However you receive your funds, what ends up in your bank account needs to match your deposit report in your dental software, to the penny.
The daily deposit report simply lists out what collections you have posted to your dental software that day, and it can be easily created within your dental software.
So, why is a daily deposit report important?
The daily deposit report lets you know that what's in your dental software is also what's in your bank account. It helps you make sure every cent matches across your software bank account, because if it doesn’t - you’ve either made a mistake on data input in your software or are missing some money in your bank account.
This report will also separate the type of payment. Your daily deposit report will show patient cash, patient checks, and patient credit card payments. It will also show insurance checks, insurance EFTs, insurance virtual credit cards.
You now know why it’s important, so let’s go through the key benefits of running a daily deposit report at your dental practice.
Benefit #1: You will know what money was collected
So obviously, you need to know how to track all forms of payment coming into the dental practice.
This is the most obvious benefit to running a daily deposit report. As an administrative team member or business owner, you should be aware of your net payments, insurance write-offs, and adjustments every business day.
The daily deposit report gives every person a snapshot of all income-related transactions (including payments, credits, and refunds) that day, and it’s an easy report to pull up to compare to your bank account deposits, making sure the money you made is all there.
You can compare these reports by rolling dates, and see if your practice has good cash controls in place to maintain a healthy collection rate of 98 to 100% of the net (adjusted) production.
This information will help you determine if you need to update your patient payment policy, review your insurance billing and patient billing system or if your team needs additional training to collect unpaid patient balances.
Your deposit report will also show you the results of any payment incentives such as discounts to encourage certain payment methods - like cash or checks. Or you could start charging small fees for the usage of credit cards. In any case, your daily deposit report will show you each patient’s method of payment to give you this information.
You can also use this report to find mistakes or possible abuses. If what you posted to the dental software does not match your bank account - an error has occurred. Let’s get into that next.
Benefit #2: Your administrative team will know when they have made a mistake
Not running this report is exactly how you miss errors.
Because this report lays out forms of payment and funds received that day, you’re able to compare the report to your bank account and see exactly what does and does not balance.
Many times patients make payments via your website or patient portal. Sometimes these payments are overlooked and not applied to the patient’s account and this creates a problem with your end-of-month bank reconciliation, inaccurate billing, more work for the administrative team, and also a potentially upset patient.
If the daily credit card batch or close report is not reconciled with the deposit report this becomes an accounting headache at the end of the month.
For example, if insurance checks are being deposited into your bank account, but you realize what you charged the patient is not the full difference of the amount insurance sent you, you’ll need to charge the patient again. Unfortunately, this will make your patient a bit annoyed, but it’s necessary for your practice to get what it’s owed, and the patient is always responsible for the payment of the procedure.
Even if it’s just $20-$50 that you’re owed, that’s something you’ll see when you reconcile for the day in this report, and if you let it go too many times, that number can add up.
And let’s be real: if this type of data entry error is recurring - where the patient is charged the incorrect amount originally and later sent a follow-up bill - there might be a bigger issue to explore within your dental billing process.
Learn 6 common dental billing errors that will cost your practice in our Learning Center.
The bottom line is that the daily deposit report can help you spot workflow issues quickly. Speaking of workflows - this report will also help you hold your team accountable. We’ll cover this next.
Benefit #3: A clear system of checks and balances at the dental practice will prevent embezzlement
Running your deposit report and your reconciliation can also help pinpoint embezzlement, fraud or reveal possible improprieties.
No doctors ever want to think they have a dishonest employee, but it happens. Your day sheet and deposit report can flag things like a cash payment posted to a patient’s account, yet not showing up in your bank account. Where is that cash?
Another red flag to look for: Credit card batch processes that show refunds that are not reflected in the practice management software day sheet or deposit slip reports.
If multiple people are looking at this report daily - everyone will be held accountable for disparities, and employees will feel less emboldened to commit embezzlement.
This system of checks and balances also helps if your practice is ever audited. If you run this report every day and are confident that every dollar you’ve made is identical to what is in your dental software down to the penny - you will have fewer legal worries. You will know the state of your practice financially, and an audit won’t sound so scary.
Ready to confidently and regularly run reports at your dental practice?
When you pay extra close attention to the performance of your dental practice, you’re able to evaluate every facet of it easier.
The daily deposit report is truly just scratching the surface of all of the data you could explore when it comes to your practice. But having this everyday reconciliation of your deposit report, day sheet, and all insurance write-offs and adjustments can indicate your financial state, catch errors, and prevent illegal activity among employees.
Dental ClaimSupport is a billing tool that helps practices optimize their billing process in a way that helps them stay organized and profitable. When we work with offices, we run this report for the insurance payments we post for you, among other reports that let you know how your practice is performing.
To dive deeper into what kind of reports your practice should be running, read our article “5 reports necessary for running a successful dental practice.”
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