4 Financial Reports to Run Before you List (And How to Pull Them)

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The beginning of the year is a time to plan out projects, start new systems, and perhaps take a moment for reflection on what you want the new year to hold. If you are thinking, “I want to sell my dental practice this year,” there are steps that you can take now to

  1. increase the value of your practice and
  2. help streamline the transition.

Wherever you may be in your transition (just thinking about it, interviewing brokers, etc), the following list is meant to give you a better understanding of the overall health of your practice. The more you know about your organization now, the more time you have to strengthen its weaknesses and make it more attractive for a future sale.

Below are four practice reporting tasks that Cornelia Hinkle – Practice Transitions Group’s diligence and transitions specialist – advises to get your financials in order, especially if you’re considering a transition.

Financial Reporting Worksheet Download

1. Update the books to close out each quarter.

You or your practice manager should pull a production and collection report to send to your CPA. The CPA will then produce a balance sheet and your Profit & Loss Statement (P&L).

Your CPA should check that revenue aligns with the collections that you are reporting.  Note: Collections from patients and insurance is equivalent to the collection report from your dental software.


  1. Production report – this report is a summary of charged-out procedures to patient ledgers for completed treatment. This report also provides adjustment categories for reconciliation between gross and net production.
  2. Collection report – this report is a summary of insurance and patient payments entered into ledgers to be reconciled with the deposit slip.
  3. Balance sheet – a statement of the assets, liabilities, and capital of your business that details the balance of income and expenditure.
  4. Profit & Loss (P&L) Statement – a financial statement outlining your practice’s revenue, costs, and expenses over a particular time.

2.  Pull practice management reports.

  1. Understand and know your collection and production totals, and evaluate your collection-to-production ratio.
    •  The most healthy in-network insurance practices collect 96% to 98% of production.
    • The most healthy fee-for-service-only practices collect 98% to 100% of production.
  2. Hold your finance department accountable to ensure that they are collecting money accurately and efficiently. 
  3. In order to sell within the next 5-7 years, your collection and production process needs to be streamlined.

  • Gross Production (or UCR fees) – the cost of your services to patients
  • Adjustment – the discount on the service from an insurance  company
    •   Example: $100 (service on practice fee schedule) $60 (Delta Dental’s reimbursement) = $40 (the adjustment)

3.  Pull an accounts-receivable-only report.

  1. Pull your accounts-receivable-only report from your practice management software.
    •  Be sure to close out the month and year based on software requirements to update data for accuracy.
    • Look for outstanding patient and insurance balances.
    • Specifically, here are each of the steps for insurance AR:
      1. Look at the open claims over 90 days and 60-90 days
      2. Research the claims and determine whether or not they are collectible. 
      3. If they are collectible, follow up with Insurance, resubmit claims or missing supporting information, and request payments.
      4. If the claim is uncollectable, close claims, move the balance to the patient, collect or apply appropriate adjustments/write-offs
    • For Responsible Party AR:
      1. Review accounts for accurate patient balances. 
      2. Apply appropriate adjustments/write-offs. 
      3. Collect from the responsible party or initiate 3rd party collections.
  • Accounts Receivable – money owed to your practice by its debtors

4.  Pull a credit-balance-only report.

  1. Pull your credit-balance-only report from your practice management software.
  2. Review each patient and identify if the credits reported are true credits.
  3. Determine which accounts are not prepaid treatments to confirm if each patient truly has credits. You or the practice manager should review if credits have been applied properly.
  4. Before issuing a refund, always consider current open claims of other family members on the same account.  
  • Credit balance – a credit amount the practice owes to the patient


In our experience, most people do not know how to pull these stand-alone reports. Reach out to us at the Practice Transitions Group if you need help. It is important to pull them separately because the software mixes credits into existing balances. Pulling a combined report mixes all accounts with a balance, regardless of whether or not it is an accounts receivable or a credit.

If you are saying, “I want to sell my dental practice,” it is wise to begin looking closely at and understanding how to run reports to analyze the numbers of your practice. Your ability to probe and reconcile your financial systems will only facilitate a more streamlined process when the time comes to sell.

Cornelia Hinkle is Practice Transitions Group’s diligence and transitions specialist. Before moving to Practice Transitions Group, Cornelia was a regional practice manager over nine practices ranging across all specialties. 
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