What Is a Treatment Deposit in a Dental Practice?
A Treatment Deposit is an upfront payment collected from a patient before the full treatment is completed.
It serves to:
- Secure the patient’s commitment
- Reserve chair time
- Improve cash flow upfront
However — from an accounting perspective — it is not revenue yet.
Until the treatment is delivered, the deposit remains Deferred Income — a liability, not profit.
Why Treatment Deposits Matter for Dental Practice Owners
Many dentists see a deposit hit the bank and assume it’s earned — but this mistake can:
- Overstate revenue and profit
- Lead to premature tax on undelivered services
- Encourage unsafe personal drawings
- Misalign clinical delivery and financial reporting
Example:
| Timeline | Action |
| Jan 5 | Patient pays £1,500 for Invisalign |
| Jan–June | Treatment is delivered across 6 appointments |
| January Revenue | Only £250 (1/6th) is recognised |
| Remaining £1,250 | Held in Deferred Income, released monthly as treatment proceeds |
DentPulse tracks this flow automatically, linked to diary data and treatment completion.
How Treatment Deposits Are Handled in Accounting
| Step | Entry |
| On Payment | Dr Bank / Cr Deferred Income (Liability) |
| On Treatment Delivery | Dr Deferred Income / Cr Revenue (Accrued) |
This ensures you only show earned income in your Profit & Loss — not just cash movement.
How DentPulse Tracks and Automates Treatment Deposits
| Feature | Function |
| OWS™ Engine | Tracks undelivered services linked to prepayments |
| Deferred Income Ledger | Holds deposits until treatment milestones are met |
| PPP™ Overlay | Prevents unsafe drawings from unearned income |
| Revenue Recognition Sync | Auto-converts deposits into revenue as treatment completes |
| Tax Module Integration | Ensures VAT (if applicable) and income tax are applied at the correct time |
DentPulse protects your profit integrity, tax timing, and cash flow clarity — without spreadsheet stress.
DentPulse Tip™
Cash in ≠ Revenue earned.
A deposit is a promise — not a profit.
If you spend it before you deliver, you’re building a house on sand.
Related Glossary Terms
- Deferred Income – Where deposits live until treatment is delivered
- Revenue Recognition – When a deposit becomes real, reportable revenue
- Accrual Accounting – Ensures income matches treatment, not payment
- OWS™ – Outstanding Withheld Services – Tracks prepayments with uncompleted care
- PTP™ – Profit-to-Pocket – Keeps personal pay linked to delivered work
Glossary Summary Table
| Term | Meaning |
| Treatment Deposit | Upfront payment from a patient before treatment is delivered |
| Purpose | Secures patient commitment and boosts cash flow |
| Financial Impact | Improves liquidity but must be deferred until treatment is earned |
| DentPulse Advantage | Automatically tracked and converted into revenue at the right time |
