Last Updated: 10/10/2026
Dental Chart of Accounts for Overhead Benchmarking
A chart of accounts is the list of categories on your financial reports. Income accounts, expense accounts, and balance-sheet accounts. Every transaction gets one. If the list is a generic small-business list, dental supplies, lab fees, staff wages, and owner pay end up in accounts you can't benchmark with other practices.
A dental chart of accounts is that account list built for a practice. The expense accounts are named so they can be easily split into five overhead benchmark groups and calculated as a percent of collected revenue: personnel, clinical, facility, general business, and discretionary. The Chart of Accounts does not calculate the percentage. It makes the calculation possible. Collected revenue is the income figure that those groups are divided by, not production.
Payroll Departments
One change you can make to your Chart of Accounts that will have the biggest impact on dental overhead benchmarking is to categorize gross pay/wages by department each pay period.
Separate payroll by these departments:
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Owner
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Associates
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Dental Assistants
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Hygienists
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Office/Admin
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Owner's Spouse
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Owner's Family
List of payroll and contractor accounts in QuickBooks:
Use these payroll and contractor accounts in QuickBooks to optimize your list of accounts for dental overhead benchmarking.
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Gross Pay - Owner
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Gross Pay - Office/Admin
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Gross Pay - Dental Assistants
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Gross Pay - Hygiene
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Gross Pay - Associates/Doctors
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Gross Pay - Spouse/Children
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Payroll Taxes - Owner
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Payroll Taxes - Staff
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Payroll Taxes - Associates/Doctors
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Payroll Taxes - Spouse/Children
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Health Insurance - Owner/Family
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Health Insurance - Staff
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Health Insurance - Associates
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Pension Matching - Owner
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Pension Matching - Spouse/Children
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Pension Matching - Associates
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Contractors - Doctors
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Contractors - Temps
Suggestions:
There is no reason to break the departments down even more, like front office, back office, office manager, sterilization techs, etc. You can't compare apples to apples that way, so it adds no real value and becomes redundant. Keep it just to the essentials.
Common Mistakes:
I often see dentists mistakenly include associates in personnel (team) expenses when categorizing into overhead benchmark categories. Don't do that. Treat associates' costs like the owner's when comparing overhead expenses to industry averages, so track associate compensation in separate expense accounts from the rest of the team in your Dental Chart of Accounts.
Note about Spouse/Family payroll:
Separating Spouse and Family expenses in the Dental Chart of Accounts lets you move their compensation into your dental benchmark categories based on their office activity. Often, owners put a spouse or child on payroll for a tax reason. If that person fills a job you would hire for, include the pay in the personnel overhead category. If you would not replace them, leave it out with owner pay. The accounts stay separate either way, so you can move the wage without reclassifying the rest of the staff.
Track outsourced services that replace staff:
To compare a wide range of practices apples to apples, our team watches for differences between outsourced and in-house staff expenses that might skew the dental benchmarks.
For example, if you use an outsourced billing service instead of having an in-house accounts receivable person handle this role, we want those expenses in the same place as they would be for an in-house person, since most practices use an in-house employee for billing/collections. This categorization makes for a more reliable comparison of overhead percentages.
In the Personnel (Team) category of the practice overhead benchmarks, we list expenses commonly provided by staff but occasionally outsourced. You'll want to track the specific outsourced services that replace staff in their own expense accounts, such as these:
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Answering Services/Scheduling Services
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Collection/Billing Services
Note: Don't go crazy with this. I'm just talking about the common big-ticket items you'd see staff doing in the average practice, usually scheduling and billing services. ​
Make 'Patient Refunds' an income account
Calculating practice overhead percentages is based on the percentage of income. So if your total income isn't correct at the top of your Profit and loss report, then none of your overhead as a percentage of that total collected revenue will be correct either.
Patient refunds (including insurance refunds) should be an 'Income' type account on your Dental Chart of Accounts. That's because they're returns of collections that were never meant to count as income, so you'll want to reduce your total income by patient refunds. Then your overhead expenses, as a percent of your true income after you subtract refunds, will be accurate.
I often see patient refunds mistakenly added to expense accounts instead of income accounts. So, go into your QuickBooks Chart of Accounts and change the account type to a primary income account.
Patient Refunds to Credit Cards:
When you refund a patient to their credit card, it may appear in your bank transactions as an expense. So, those will mistakenly be recorded in the merchant fee expense account. However, those credit card refunds should be in the Patient Refunds income account.
CareCredit Income:
Some patient financing companies, like CareCredit, deduct their fees directly from your deposits instead of charging them separately. When you record the deposit, your total income is lower because of those fees.​
Therefore, you must add those fees back to your deposits in the Patient Fee Income account on your Profit and Loss report. Merchant services or financing fees shouldn't lower your income.
Adding the fees back to income shows the true income before the fees were taken out, which is the income you want to use to calculate overhead percentages. At the same time, you will be moving the fees to the Merchant Fees expense account on the Chart of Accounts.
Simplify the number of accounts:
Your Chart of Accounts doesn't need to be so complicated for tax returns or dental benchmarks. In fact, the simpler you can make your accounts list, the easier it will be to benchmark overhead and minimize mistakes.
A dental practice's Profit & Loss report should include no more than 90-100 accounts. Less is more, as long as you have the essential accounts for overhead benchmarking and tax records.
Don't use sub-accounts:
Overused sub-accounts in the Dental Chart of Accounts are probably one of the biggest reasons we find many bookkeeping mistakes, and they also reduce the quality of dental overhead benchmarking.
When you record transactions using sub-accounts, it becomes increasingly difficult to know whether you are recording them in the correct sub-account under the 'Parent' account because sub-accounts create chaos and are easy to confuse. If you are familiar with bookkeeping in QuickBooks Online, then you already know what I'm talking about.
Only exception for sub-accounts:
The only exception to using sub-accounts in your Chart of Accounts is gross payroll and the employer portion of payroll taxes. Since we recommend splitting payroll expenses by department, sub-accounts keep everything together so you can cross-check total gross pay and employer taxes against your payroll report totals to ensure accuracy. Personnel is around 30% of collected revenue, so it's important to make sure it's correct when benchmarking overhead.
The accounts set up the benchmarking
Accounts split by department, refunds in income, and adjusting for CareCredit fees out of the deposit are what make the overhead percentages comparable. Owner and associate pay stay in their own accounts. A working spouse goes in personnel only if you would hire someone for that job.
The 2026 averages are the comparison: 62.2% of collected revenue, owner and associate pay excluded.
Keeping the accounts simple and error-free is monthly work. Mistakes in the bookkeeping and an account list that becomes inconsistent over time make the percentages no longer comparable.
Sona Wegner is the owner of Percentology. She has an accounting degree and an MBA, started at a dental CPA firm in 2007, and has worked with dental practices since. She started Percentology in 2013.