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September 2012

DentaLab NewsSeptember 2012
from Mainstreet Systems & Software

FAQ  DentaLab News

 

For Labs Serving the USA:  It's Time to Start Preparing for the Medical Device Tax

Like many others in this industry, we initially thought the medical device tax that will begin January 1, 2013 could be handled in the same manner as sales taxation in QuickBooks.  After conferring with the Internal Revenue Service, the NADL and various forums on this topic, we have learned that this is an excise tax that is the responsibility of the manufacturer, not the customer. The standard software mechanisms for handling sales taxation for customers will not be applicable for this.

There have been efforts in Congress and many others to have this tax repealed, but at this point the Affordable Care Act of which this is a part has been confirmed by the U.S. Supreme Court and the tax will likely go into effect on January 1 as planned.  Despite efforts on the part of the NADL and others in this industry, dental restorations will be considered medical devices and subject to the tax.

To provide software support to tally the correct sales and taxes, we are adding the following to the October release for DentaLab for QuickBooks:

1) In Options/Invoice Settings, you will be able to specify the medical device tax rate.

2) In Basic Lists/Items, you will be able to indicate which items are subject to the tax.  Note that some lab services such as case planning, shade verification, chairside consulting will not be subject to the tax.  Billings involving a physical product such as crowns, bridges,dentures, implants will be subject to the tax from the provisional to the completed stage.  Delivery and insurance, if charged separately, will not be subject to the tax.

3) In Reports/Sales Analysis, there will be a new report: Items Subject to Medical Device Tax.   For a specified date range this will provide the invoiced total for each item, along with the calculated tax and then grand totals for both.   These can be used in IRS Form 720 for reporting on a quarterly and annual basis and can also be entered into QuickBooks for the electronic payment.   In addition, this report will provide supporting document should you be audited.

Already in DQB is provision for recording your FDA Registration number.  In your planning, be aware of these things:

1) You can try to recoup this from your customers in the form of a price increase or as a separate line item on your invoices, but keep in mind that the tax is on the  amount billed.   Therefore, if you increase an item from $100 to $102.30, the tax is calculated on $102.30, not $100.   If the customer is savvy, they will likely refuse to reimburse you for the medical device tax line, citing the IRS regulations that this is a tax on manufacturers, not on customers.  

2) The full amount for the medical device is taxable and cannot be reduced by rebates or discounts.

3) Since this is a tax on manufacturers, no customers are exempt.

4) If you are in a state and/or county that already imposes sales tax on your work, the items subject to the sales tax may be different than those subject to the medical device tax.

We have developed a document called DQB Compliance Measures that covers this tax as well as other requirements.   Let us know if you would like a copy emailed to you.

We ask that those who have gotten behind on updating their systems allow enough time to accomplish this as soon as possible.   Do not wait until the holiday season at the end of the year.    All labs serving the USA should definitely plan to implement the October release and then begin the preparation you will need for January 1:

  • Determine which items will be subject to the tax and mark these in the item records.
  • If you have been charging a flat price, but now a portion of this would not be subject to the tax, you may want to break this down into separate items.
  • If you will be changing your price structure to cover this tax, you will also need to determine how you will handle this with your customers.  
  • If not yet setup for e-filing with the IRS, register for this at http://www.irs.gov
  • If not yet setup for your excise tax free sales, file IRS Form 637.  When purchasing from another company that may be subject to the medical device tax, add to your purchase order "articles are being purchased for further manufacture" and list your 637 registration number. 
  • Be on the lookout for revised IRS forms 720 and 637 to review the information you will need to provide.

 

DentaLab for QuickBooks- Fall Group Training & Workshops

For those who prefer personal training and interaction, we have scheduled one session this fall.    We have scheduled on Monday based on the preferences expressed in the initial responses and to allow those who are coming from a distance time to travel here over the weekend. 

Autumn is a beautiful time in this area with lots of Indian summer days and colorful foliage.  If you are coming, let us know if there are specific topics you would like to have covered.

Fall Session:   Monday, October 22, 2012

                    9:00 AM - 4:00 PM   (Doors open at 8:30 AM)

Location:       Village at Lederach, Suite 250

                   656 Harleysville Pike, Harleysville, PA 19438 USA

Morning:        Basic Training based on DQB Release 1.32

Lunch:            We will provide lunch and beverages.

Afternoon Workshops:

                        Software Support to Meet Compliance Requirements

                        Using the Internet:  Benefits and Risks 

                        A Preview of the DQB Tablet Apps

Idea Exchange throughout the day.

Fee:   No charge if covered by support agreement or initial no-charge period

         $150 per person for all others

This session is limited to 8 persons.  Please contact us by September 21 to reserve a spot.

 

    Easy, versatile software for the modern dental laboratory.

Frequently Asked Questions

Q:  Can you tell us which of the settings in DB Options are applicable to all users and which ones to just the logged-in user?

A: Yes, but the list is too long to cover in this newsletter.   You can request an electronic copy of our document:  DQB System and Local User Settings.

Q:  We really like the new DQB feature to directly link from case entry to track shipments via the internet for FedEx and UPS.  Can you add more services?

A: Yes, if the service provides an online tracking system and allows developers to provide links to it.

Q:  For the online shipment tracking, do we have to have the case marked as shipped?  Can we scan the barcode to enter the tracking code?

A: No, the case does not have to marked as shipped or for any of the other indicators such as completed or invoiced.   The connection that is needed is to be sure the Ship Method is set to either FedEx or UPS so the program knows which site to use.   Yes, you can scan the barcode to enter the code or use the Windows clipboard or the keyboard.

Q:  Would you entrust all of your business information to the cloud?

A: No, not at this point in history.  This is the decision that most experienced businesses are also making.  Most want to retain security and control for their core  information and allow access only to those areas where having mobile or remote access is very beneficial.   The internet is largely unregulated and it has come to be that high levels of security are needed and even these can be and have been breached.   It is better to provide limited information, as appropriate, to authorized users.  

It is very appropriate and wise, however, to communicate your marketing information via the internet to let potential and existing customers know your offerings and how to contact you.   But information on your customers, your sales and other financial data should be highly secured.   Know also that today's technology allows you to be your own host for whatever internet services you want to provide. 


   With the same look and feel of QuickBooks.

A New Way to Track and Measure Workflow

We have been testing and fine-tuning the new tablet app for tracking and measuring workflow in the lab.   This app uses touch technology and is browser-based,  but you can also work with it on the desktop with the standard Windows Internet Explorer.   Included will be:

  • selection from items pre-assigned to a specific technician and those simply assigned to a work center for one date or a range of dates
  • touch entry to record start and completion dates and times with pause/restart capability
  • a manager view/edit for a selected date range for all technicians or one technician
  • reporting on the workflow to show the status of each scheduled case item at any time
  • case item analysis to report quantity, total work minutes and average work minutes per unit for a selected date range
  • completion dates and time as well as the technician will also be displayed in the standard DQB case item grids
  • the DQB master schedule will, of course, all be updated for completions  

If you would like to join in the beta-testing, let us know.   You will need to have an Android, Apple IOs or Windows 8 tablet.  Our target for the beta-test phase will be late September. 

As time allows, we will continue on with more features useful for a technician such as viewing case plans and/or communications, adding tech notes. 

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Customization is available for all products.

Contact us at 1-800-257-4535 or www.mainstreet-systems.com.

"We love the alerts!"

Kathy Lovett
Lovett Dental Laboratory, Ohio


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