What Is Revenue Recognition in a Dental Practice?
Revenue Recognition refers to the accounting principle where income is only counted when treatment has been delivered — not when the patient pays.
In dentistry, this distinction is critical.
Production ≠ Collection.
You only “earn” the revenue when the clinical service is completed.
Why Revenue Recognition Matters for Dental Practice Owners
Many dentists confuse cash in the bank with earned income — leading to:
- Premature profit reports
- Unsafe drawings
- Misleading tax estimates
- Overstated financial performance
Example:
- Patient pays £2,400 deposit in January for Invisalign
- Treatment will span Jan to June
→ Revenue Recognised in January = only the portion of treatment delivered
→ The rest = Deferred Income until it’s clinically fulfilled
Failing to separate the two can falsely inflate profit and damage cash flow planning.
Revenue Recognition vs Collection
| Term | Meaning |
| Collections | Money received — includes deposits, plans, NHS advances |
| Revenue Recognised | Money earned — treatment delivered and completed |
| Deferred Income | Prepaid but undelivered treatment value |
| Accrual Accounting | Aligns revenue with treatment completion, not payment timing |
DentPulse tracks both — so your reporting reflects actual performance, not illusions.
How DentPulse Tracks and Automates Revenue Recognition
| Feature | Function |
| Treatment Delivery Sync | Links revenue to diary, UDA delivery, and clinical milestones |
| OWS™ – Outstanding Withheld Services | Tracks prepaid but undelivered work |
| Deferred Income Ledger | Holds unearned income until delivery is confirmed |
| PPP™ Overlay | Prevents personal profit drawings from unearned income |
| Monthly Accrual Engine | Automatically recognises revenue by treatment phase |
DentPulse makes revenue recognition as per UK GAAP (FRS 102) accurate, automatic, and audit-ready.
DentPulse Tip™
“Money received ≠ money earned.”
Only count revenue when you’ve delivered the value — not when the card machine beeps.
That one shift protects your tax, your drawings, and your financial sanity.
Related Glossary Terms
- Deferred Income – Prepaid but undelivered revenue
- Accrual Accounting – Tracks earned revenue, not just received cash
- OWS™ – Outstanding Withheld Services – Measures undelivered treatment value
- PTP™ – Profit-to-Pocket – Ensures only earned income funds personal drawings
- Treatment Completion Rate – Triggers earned revenue recognition
Glossary Summary Table
| Term | Meaning |
| Revenue Recognition | Recording income only when treatment has been completed and value delivered |
| Purpose | Prevent overstatement of income and protect financial accuracy |
| Financial Impact | Ensures true profit tracking, safe drawings, and tax compliance |
| DentPulse Advantage | Syncs diary, plans, NHS UDA, and delivery milestones — automates accurate recognition |
