Over the past five years up to 2019, the Dental Industry has benefited immensely from dentistry technology advances and improved access to care for individuals who may not otherwise receive care. Rising disposable income and our shrinking low unemployment rate have also supported the ability of almost everyone to afford out-of-pocket payments for treatments, which makes for the second-largest source of industry revenue. All things considered; industry revenue is estimated to increase exponentially in 2021. But given the issues still facing the industry, your practice may be at risk for financial challenges. It's essential for the dental accountant to have not only a firm grasp of financial accounting but the knowledge of the Industry financial struggles.
At TK Accounting & Consulting, we have a combined 50 years of professional accounting, financial services, and dental industry-specific accounting. We are here to help you overcome the challenge you may face to help your business's continued growth.
We SOLVE the BIGGEST threats to your practice
Below are 5 dilemmas your practice will face THIS YEAR
3. Reviewing internal controls
Monthly or Quarterly reviews on cash and receivable adjustments can keep any practice from becoming complacent and comfortable with the current procedures, especially if cash flow is in good standings. Even with this, you can't overlook your receivables. Keeping tabs on when you are receiving collections... Are they 60 days? 90 days late?
For this you may need to work with an experienced accountant to generate an efficient policy for collections that works for the busy and the slow periods of the year. But here are some ideas before you're ready to hire an accountant. For lower, more inexpensive treatment plans, ask your patients for up front payments. This process ensures that the patient is less likely to miss their scheduled appointment. This also avoids delays in your dentists scheduling and decreases the hefty accounts receivable report. Remember, you're a Dentistry practice, not lending tree.
4. Communication with your patients
Patient satisfaction can vary tremendously from dentist to dentist. One of the most common found reason for this is the communication between Dental offices and their patients. Maintaining this open way of communication with your patients is one of top priority. Keeping them in the loop and explaining as well as answering all their questions can make a world of difference in how much they value your services.
Explaining potential problems or complications from procedures
Changes that have been made to certain fee schedules
New treatment possibilities
Your company's availability to perform treatments and certain exams
If you believe something is important to your patients, it doesn't hurt to bring this to their attention.
Creating a more positive relationship with your clients and patients is one of the easiest and best ways to help your practice grow.
1. Annual Budgets
It's pretty common to have the idea to create a budget. Where many fall short, if they actually do prepare one, is the follow-through. It's too easy to spend outside of the budget on miscellaneous expenses that once it's attempted, and fails. People tend to give up.
To start a budget, it's easy. We simply use the previous years' financial report and use the key benchmarks to set the standard for the year ahead. But we can't just start and stop there, and file it away. Today, with programs like QuickBooks, a budget can be prepared rather easily. This can be a wonderful program to use to understand the company's financial standing. We use this information as a reference guide about where your business is heading and how it can grow. These reports will help you establish and understand certain spending trends and show struggling areas. Our accountants are quickbooks pro-advisor certified, or simply put, experts. We will train you how to utilize this tools more efficiently.
2. Fee Scheduling
Another system that is typically overlooked or forgotten is updating your fee schedules. Can you remember the last time the owner or the billing staff made this update? Chances are its time to give those fees some reevaluating. Even making small changes to routines can make all the difference in the company's progress. Generating strong financial policies that are stated clearly, understood and accepted by patients with specific treatment plans can only benefit the Company's growth.
5. Communication with your patients
The average dentist earns about $125,000 a year, which places them in the 28% tax bracket. That is after they pay nearly $20,000 in FICA taxes. Due to this taxes are a huge burden on your practice. This problem may grow due to the constant target anyone making over 6 figures has on their backs from law makers. The troubles also grow if you put your taxes on the back burner. The first third of the year tends to be busier. If the practice doesn’t pay enough taxes while it is busy, it can have a lot of trouble making up for it in the following months. Determining whether you need to pay sales tax on certain items is also a big challenge for many practices. For example, if your practice sells items directly to it's patients, such as toothbrushes, toothpaste, whitening products. Or, if your practice purchases equipment such as bibs, gloves, dental masks, you may be subject to sales and uses taxes. Its best to know and understand the tax codes specifically.