Have you ever felt it challenging to manage both your dental practice and all its expenses? If the answer is ‘Yes’ then you are not the only dentist finding it challenging to manage both, many dentists experience the same. The busy schedule of a dentist makes it very difficult for a dentist to manage both the clinic and the expenses efficiently. But, for your dental practice to thrive, there must be an amalgamation of your dental skill along with active management of monthly costs and expenses.
Managing the finances plays an important role in the working of a dental practice. For a smooth functioning of a dental practice, managing the cash flow is very important. Proper management of funds ensures the smooth running of the dental practice. So, a dentist must never neglect the importance of managing finances.
Running a dental practice has more to it than just helping patients with dental care.There are many financial aspects that run simultaneously. So, how does a dentist take care of all the financial aspects of a dental practice? Here below, we share tips on how to manage the finances of your dental practice.
What are the benefits of efficient Financial management in dental practice?
Understanding revenue is essential for various reasons which include:
- Efficient management of finances at your clinic gives you the confidence to make decisions. This confidence can help you make conscious financial decisions for your clinic.
- Keeping a track of expenses helps you set daily production goals. These daily production goals help you choose the right path as you progress towards your planned destination.
- Tracking expenses help you monitor the financial decisions taken. The conscious tracking of costs ensures that there are no discrepancies and helps you avoid ending up in financial crisis.
- An efficient tracking of costs helps you to understand employee expenses and correlate it with office expenses. The monitoring of collection and production of the clinic help you know if you are over or understaffed.
- While tracking expenses, a dentist must take special care to track down the details of new patients and consider their reappointment and reactivation.
- In many instances, it is seen that while tracking expenses dentists come across patients who had promised to pay earlier but later denied to make the payment. Tracking expenses helps you make sure that all pending payments are cleared every month.
- While you track your expenses, you should also consider managing proper expenditure. Especially while purchasing dental supplies. Always evaluate the actual cost of dental supplies. The actual cost implies the hidden costs like damaged or defective products, shipping and handling charges. Along with these hidden costs, overstocked products should also be considered.
- Monthly tracking of expenses ensures that you do not overspend on lab expenses. Keeping a check on lab expenses ensures more savings. Ideally, lab expenses should not be more than 10% of the practice’s overhead. But while switching labs, make sure that the chosen lab provides at par services. Choosing a subpar lab may jeopardize your practice, and you might lose your patients.
- Frequent tracking of expenses ensures that the monthly overhead is well managed and you do not run out of your savings.
- Proper management of funds ensures the acquisition of funds. Acquiring needed funds plays a significant part in the financial management of your practice.
- Comprehensive management of finances increases your profit, thus ensuring proper utilization of funds to expand your clinic.
Lastly, the most important thing to ensure is savings. Efficient financial management helps to promote savings. The funds that are saved, can later be used to promote the practice.
A practice cannot be successful without proper financial management, and hence its importance must be acknowledged by all the dentists.