Owning your dental practice is an exciting and demanding experience. In all the work of keeping the company running, attending to patients, resolving employee issues, etc., several dentists forget to pay attention to an important thing – their overhead. It’s not unusual to find a practice doing well, getting a good number of patients yet running with overhead that is almost 80% their revenue.
An overhead too high is never right for the business as it just drains all the money you’re making. Also, many of these dental practice owners don’t even know why their overheads are so out of control. An ideal practice’s overhead shouldn’t exceed 55 – 60% for that business to thrive. So why does your overhead appear so uncontrollable? Here are some things that may be responsible.
You’re Not Focusing on All Your Numbers
One thing common among dentists is ignoring some numbers they don’t think are essential. You may be keeping an eye on your account balance, level of production, and tax, but ignoring how much is going into your overhead costs. Even though your practice is growing and getting more revenue, your net income can remain stagnant if your overhead continues to increase.
Are you having the problem of increasing overhead costs? Then it’s time to have a professional dental CPA Kansas City take a look at your finances.
Always remember that a 10% decrease in overhead can add a whopping $100,000 income to your million dollar practice.
You’re Having Too Many “No Show” Patients
According to the famous statement, “time is money.” Wasting time simply means you’re losing money – especially in an appointment-based industry like dentistry. Whenever a patient fails to show up for an appointment, that time is wasted, meaning no income but the same running costs. Basically, a “no show” patient makes you lose money. If such “no shows” happen frequently, your overhead costs will definitely overwhelm your income. You can resolve this issue by finding ways to increase patients’ loyalty and get new patients too.
You Have Fraudulent Employees
The different moving parts of a dental practice makes it more susceptible to embezzlements and fraudulent activities by employees. Employees can increase your overhead level by stealing you’re your business, overclocking works hours, manipulating books, and many other schemes. A good number of dentists get defrauded by employees because they don’t know how to accurately monitor books and secure assets. You can work with a dental CPA in Kansas City to secure your books and prevent any staff embezzlement.
Your Income Remains the Same While Expenses Increase
As time goes on, you may have to increase employee salaries, add more incentives to staff packages, pay higher rent and utility fees, etc. If your income is not rising with these bills, then your overhead level will definitely spin out of control. Find ways to get higher income levels. Encourage your employees to bring in new patients. Improve your marketing strategy. Just make sure your income is not stagnant as those overhead costs soar.
Not sure on how to rein in your overhead level? Get help from an expert dental CPA in Kansas City. These guys have in-depth knowledge of how dental practices thrive and can point you in the right direction.