While the economy is up in the air – still – and the long-term effects of the recent natural disasters are undetermined, there are things in this world that dental practice leaders most certainly have control over. One of them is the success of their dental practices. Below is a cheat-sheet of issues that we commonly see among dental practices and how to ensure a practice doesn't fall victim to these issues.
1. Don't blame the economy...
While all of us are affected by the economic downturn, do not let such trends be an excuse for not performing. Dental practice owners should take charge of their practices and educate patients on the importance of immediately addressing small dental issues, which, if left untreated, can turn into health threatening expensive issues. Treatment plans evolve along with the maturing of the patients; by treating them early and educating them on preventative care, dental practices leave the door open for their patients to become advocates for additional services. Not only will they be happy, but what better way to market a practice than through such happy and healthy dental patients.
2. Address staff consistency and continuity
Are all staff members on the same page? If low morale is bringing down the office atmosphere, correct it. Considering that a dental office is often a place that causes anxiety for some patients, it's important that steps are taken to ensure a positive, "drama-free," and calm environment. Patients are more likely to be at ease during their visit and willing to pay balances when they have a positive experience from the waiting room to dental chair. Office productivity increases as morale increases. If a team is fragmented, patients sense the same. To combat these issues, consider holding off-site team building meetings – it's a great way to rekindle the fire in unmotivated staff.
3. Create and utilize an annual budget
While most dental practice principals have heard the term "budget" they have never attempted to prepare one. A budget can be started by simply looking at prior years financial data and utilizing key benchmarks to set goals for the current year. Don't just prepare one and put it on the back shelf. Today, with automated software programs such as QuickBooks, a budget can be prepared very easily, and used as a tool to understand a practice's financial data. Don't fear the economics; embrace the data as a fact sheet to where the practice is heading and where it can go. Such measurements can help determine trends and indicate areas which need attention.
4. Review fee schedules
When was the last time fee schedules were updated? If a dental practice owner or billing staff can't remember, it's probably a good time to re-evaluate fees. Even small changes to routine procedures can make significant strides to a bottom line. Strong financial policies with clearly understood accepted treatment plans can only benefit a practice.
5. Review internal controls over cash and receivable adjustments
Even highly successful practices can get complacent, especially if cash flow is good. But don't overlook receivables. Are collections reasonable, or are an alarming number of patients paying 60 or 90 days late? Work with an accountant to create a policy for collections that is adhered to in boom times and slow periods. And for significant treatment plans, ask patients for an upfront payment. It ensures they don't miss their scheduled appointment (one in which a dentist may have cleared four hours of his or her day), and lessens the accounts receivable load. Dental practices should not be in the lending business.
About the Author: Kenneth I. Metsky, CPA, is a partner at Citrin Cooperman & Company, LLP, an leading accounting, tax and business consulting firm based in New York City. Metsky is a member of the firm's dental and medical practices teams and advises dental practices throughout the New York metropolitan region.
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