What Does a Dental CPA Do?

Tax preparation documents what happened last year. A dental CPA's broader role is to shape what happens next: which entity structure the practice uses, how the doctor is compensated, what overhead should be watched, whether the practice real estate should sit in a separate entity and how retirement contributions are structured.

The American Dental Association's Health Policy Institute reports that about 72.5 percent of U.S. dentists were private practice owners in 2023, down from 84.7 percent in 2005. Most practices are small businesses where the owner's personal finances and the practice's finances are deeply connected, which is exactly where coordinated CPA-level advice matters.

Dental practices have an unusual financial shape: high revenue per chair, significant insurance and patient receivables, heavy fixed overhead and a doctor whose compensation is usually the largest expense. Generic business accounting misses the practice-specific metrics, such as production versus collections, adjustments, and overhead as a percentage of collections.

Pagac's Dental Financial Funnel tracks the flow from production through adjustments, collections, variable costs, fixed overhead, compensation strategy and taxable income. Each stage can be influenced, and a CPA who understands the funnel can help the owner see where the practice leaks money.

Owners should bring the questions that change decisions: Is my entity structure right for how I take income? Am I overpaying self-employment tax? What is my true overhead percentage? Should I buy the building, and in what entity? How much should I be putting away for retirement? What will the practice be worth when I sell?

These questions are interconnected. Entity structure affects tax and retirement planning, real estate ownership affects tax and the eventual sale, and all of it affects how much the owner keeps. A dental CPA coordinates the pieces rather than answering them in isolation.

Buying, selling or transitioning a practice is one of the highest-stakes financial events in a dentist's career. The CPA's role includes modeling the economics of a purchase, structuring the deal and the real estate, planning the tax consequences and coordinating with the lender and attorney.

In Pagac's dental case study, a specialty dentist relocated the practice, acquired the real estate for the new location and planned a long-term transition of the practice to the dentist's son, all within one coordinated financial plan. That kind of work combines tax strategy, real estate analysis and succession planning in a single engagement.