For a dental practice to be successful, its dentist-owner must do more than simply produce satisfied patient-customers. The dentist must operate the practice as a business – an entity that generates revenues, assesses risks, and sets long-term financial goals.
Most dentists, although incredibly knowledgeable about the field of dentistry, are not trained in the analytical methodologies required to scrutinize and evaluate the overall business functions of their practice. Even those dentists with the time and skills necessary to manage the day-to-day business operations of their practice cannot deny that their energy is better spent on the more critical role of treating patients.
Often outside financial consultants experienced in dental practice management and handling issues facing dentists can be valuable business partners. This allows dentists to concentrate on treating patients, while the business adviser provides personal attention and customized solutions that meet immediate and future business needs.
The importance of a dental financial consultant
The financial consultant can help the dentist focus on the business-side of dentistry, with the goal of building financial value, which requires concentration on two primary elements:
- Enhancing revenues and profits
- Reducing risks
A savvy financial consultant can help a dentist answers questions such as:
- How much money is my practice generating?
- What are my sources of revenue?
- What is my billing rate? Is it comparable to others in the marketplace?
- Who are my patients, where do they live, and how often do I see them?
- Is my practice offering a full array of services, comparable to those available in similar practices?
- What types of billing procedures is my practice using?
On the risk side of the equation, the consultant will have the dentist think about:
- What risks are associated with revenues?
- Is my practice dependent on one dentist, or is it a multi-dentist practice?
- How many insurance companies serve as providers?
- Is my goal to grow the practice or to retire in a few years?
- What is my cash flow?
- Is my practice based on high-volume, but low revenue-generating services, or fewer procedures producing higher revenues?
Evaluating answers to these types of questions can provide a plan for minimizing risk, while optimizing revenues. Applying measurement tools and statistical data can give greater insight into how well (or how poorly) a practice is operating. Financial consultants can bridge the gap between the dental and business sides of a practice, offering practical knowledge and skills that can help the dentist optimize value at an acceptable level of risk. They also can help with asset protection, portfolio investment, contract negotiations, employment issues, practice valuation, and tax strategies.
For further information, email Erick Cutler, Partner at Goldin Peiser & Peiser, LLP at ECutler@GPPcpa.com or call him at 214-635-2541.
As a Partner of Goldin Peiser & Peiser, LLP, Erick Cutler focuses his tax compliance and consulting work in two main industries: Healthcare and Real Estate. Throughout the year he works with clients to improve the financial health of their practices/businesses. He has vast experience in the area of cost segregation: he uncovers hidden costs outside of standard depreciation to help reduce property owners’ tax liabilities. Erick has had article published in a variety of publications including the Dallas Business Journal and various dental magazines.