Are you addicted to Spreadsheets?

Priya Kotecha discusses the downside of computerisation

(This article appeared in the Probe in August 2007)

There are two types of people in this world; those who love nothing better than pouring over their paper-work over a warm mug of tea, lovingly entering each and every nugget of information into their trusty PC; and the rest of us.

There are of course certain occasions when computerized records are a good idea – for example many practices have computerized systems in place for recording patient charges received.

I have read numerous articles in the dental press guiding dentists through ratio analysis and formulae etc which will supposedly give you an indication of how well you are doing and what needs tweaking.

To that, I would say, with the greatest of respect, that a lot of what I have read in such articles sounds as though it has been "lifted" straight of an A-level Business studies textbook. Ratio analysis is a useful tool, but only if you truly have a deep understanding of it and of what could affect or skew these. There is no sense in performing calculations every month if they do not actually help you understand your business any better. I would personally advise you to have a meeting with your accountant to discuss your profitability rather than you trying to assess it alone. These days, accountants perform a far morevaried role than just preparing your accounts. They are also your personal business advisors – so use them!

Other reasons for why dentists enter data into computer programs at half past three in the morning after a long day seeing umpteen patients and before filling in their monthly returns (hooray!), do not really justify the amount of time that very busy dentists spend in front of their computers.

1. "It helps my accountant"

   There are two points here. Firstly, if your accountant has sat down with you and explained what types of accounting procedures you need to follow, there should be no need for you to computerize anything. The rules to follow are simple and once implemented will save you a huge amount of time.

   Secondly, if you are indeed lucky enough to be picked up for an Inland Revenue Inquiry, the taxman will have no interest whatsoever in computerized spreadsheets you have prepared. He will be after "source" documentation and if there are inconsistencies between those and your accounts, you could be in for a (nasty) surprise.

   It is therefore always better for accountants to rely on source documentation rather than spreadsheets. It may be more time consuming and tricky for us, but it protects you and deep down, we accountants love it really.

2. "I need to know where my money goes every month."

Many dentists simply like to keep a check on things, both at the practice and at home.

For example, you might like to keep a record of how much you spend on lab bills a month. This can be good to know but believe me there are easier ways to do it. For example, we send our clients who are inclined towards monthly management figures a specially formulated excel sheet which they can use. It is so simple and best of all, it works – without the need for "accounting software" which no offence to the creators of such software, aren’t the most user-friendly of things.

One of the main reasons you employ the services of an accountant is that you do not have the time, means or inclination to prepare accounts for yourself. This should mean that once you give them their records and answer any queries they have, you should be able to leave them to it. The other main reason for having an accountant, is that they can potentially save you a hell of a lot of tax – but we will have to go into that another day….

Priya Kotecha (ACA, CertPFS) is a Chartered Accountant and Financial Advisor, working with Mac Kotecha & Company, where her and the senior partner deal exclusively with dentists and have been established for over 27 years. They offer Accountancy, Taxation & Payroll services in addition to invaluable advice on practice management, buying/setting up a practice and other dental issues. Contact them on 020 8346 0391 or go to www.specialistdentalaccountants.co.uk to learn more.

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This web-site was last updated on 19/07/2010

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