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Dental Accounting

Stop Drilling Over Your Books: Outsource Your Dental Practice’s Bookkeeping Today!

Cheri Schmidt | 08/22/2024

Running a dental practice isn’t just about creating bright smiles—it’s about keeping your finances in perfect alignment. If managing your books feels more like pulling teeth than a smooth process, it’s time to take action. Waiting too long to get your bookkeeping in order can cost you more than just a few headaches. Here’s why you should outsource your accounting today—before things get out of hand.

When Does Outsourcing Make Sense?

You might consider outsourcing your bookkeeping if you’re struggling to keep up with your financial tasks and it’s taking too much time. Here are some tell-tale signs that you need to outsource right now:

  • Your books are not up to date – Falling behind on your books is like skipping your patients’ check-ups—things can go south quickly.
  • You’re missing out on tax write-offs – Overlooking deductions is like leaving money on the table. Don’t let Uncle Sam take more than his fair share!
  • You’re having trouble tracking accounts receivable and payable – If you’re losing track of who owes you money and what bills need to be paid, it’s time to get help.
  • You’re struggling to stay on top of your cash flow – If cash flow feels more like a drip than a steady stream, you need to take action now.
  • Making estimated tax payments is a hassle – If calculating your tax payments gives you a migraine, it’s time to call in the experts.

Why You Need to Outsource—Yesterday!

You’ve worked hard to build your practice, so why let financial mismanagement chip away at your success? Outsourcing your bookkeeping can save you time, money, and a ton of stress. Here’s how:

  • Lower Staffing Costs Let’s be real, hiring a full-time bookkeeper is expensive. Salaries, benefits, training—it all adds up. Outsourcing lets you sidestep these costs while still getting top-notch service from a team that knows the dental industry inside and out.
  • Expertise at Your Fingertips When you work with us, you’re not just getting an accountant—you’re getting a team of dental-specific CPAs with over 30 years of experience. We stay on top of the latest tax laws and financial best practices, ensuring your books are accurate, compliant, and optimized for savings.
  • Improved Accuracy and Reliability One of the biggest advantages of outsourcing your bookkeeping is the improved accuracy and reliability it brings. Our dedicated team focuses solely on managing your books, without the distractions or multitasking that can lead to errors. We follow strict processes and standardized methods to ensure consistency in your financial records. Plus, with our use of cloud-based accounting software, you’ll have access to real-time information, allowing for better decision-making based on accurate, up-to-date data.
  • Scalable Services Your practice isn’t static, and your bookkeeping shouldn’t be either. Whether you’re expanding, adding new services, or just need extra support during tax season, we scale our services to meet your needs—no more, no less.
  • More Time for Patient Care Why spend yours or your staff’s valuable time buried in spreadsheets when you could be focusing on your patients? Let us handle your bookkeeping so you can get back to what you do best—creating healthy, happy smiles.
  • Risk Mitigation Employee turnover can be a major disruption for dental practices, especially if a key staff member who manages all your accounting needs unexpectedly leaves. This can leave your practice vulnerable, with important financial and administrative duties hanging in the balance. By partnering with us, you eliminate this risk entirely. While turnover can occur at our firm as well, the impact on your practice is nonexistent. We’ll seamlessly integrate another dental accounting expert into your team, ensuring that your financial operations remain uninterrupted. Employee turnover becomes our responsibility, not yours, allowing you to focus on patient care while we handle the rest.
  • Enhanced Security and Fraud Prevention Your patients trust you with their health—trust us with your financial security. We use top-tier security measures to protect your data and prevent fraud, so you can rest easy knowing your practice is safe.
  • Predictable Costs Surprise costs are fun in dental emergencies, but not in your accounting. With our clear, transparent pricing, you can budget with confidence, knowing exactly what you’ll pay each month.
  • Avoiding In-House Challenges Managing your books in-house can be overwhelming and prone to errors, especially as your practice grows. With constantly changing regulations and the need for precise financial management, it’s easy to fall behind or make mistakes that could be costly. Working with a dental specific CPA firm ensures that your financial management is handled by experts, allowing you to avoid these pitfalls and keep your practice running smoothly.

Conclusion: Secure Your Practice’s Future Today

Outsourcing your accounting to Botwinick & Company isn’t just a smart move—it’s an essential one. Don’t wait until financial mismanagement becomes a crisis. Let us handle your bookkeeping so you can focus on growing your practice and delivering the best care to your patients. It’s time to stop worrying about your books and start planning for your practice’s bright future.

 

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Dental Practice Acquisition – Financial Due Dilligence

Ken Botwinick, CPA | 01/16/2023

Are You Ready To Buy A Dental Practice?

You’ve taken the time to refine your clinical skills since dental school graduation.  You’ve registered with the top regional dental practice brokers. You’ve asked for help from anyone who might be able to help you locate an existing practice to buy, including practice brokers, dental equipment sales and repair representatives and your peers.

Now, what appears to be the ideal dental practice to buy presents itself.  But is it an ideal practice? Most importantly, is it an ideal practice for you? Is it a growing practice or one on the decline?

Before you throw up your arms and scream for help, here are some steps to take to ensure success.

The First Thing To Do Is To Build Your Advisory Team Quickly.

An even better idea is to compile a team of dental-specific professionals even before you find that ideal practice to be better prepared to outpace a competing suitor. Having a dental-specific CPA and a dental-specific attorney is half the battle of completing a successful practice acquisition. In addition, securing a dental-specific loan specialist at a bank will also give you an advantage.

The Most Vital Step In A Dental Practice Acquisition Is The Due Diligence Process.

Verifying the accuracy of the representations of the practice seller and the broker and evaluating the true value of the practice to you as the buyer is crucial. A CPA specializing in dental practices can be a huge asset in evaluating the merits of the contemplated practice and forecasting your success in that office as its new practice owner.

Though the merits of the practice can and should be discussed with the Dental CPA prior to making an offer, we recommend that you begin the due diligence step once a Non-Binding Letter of Intent is signed. By this time, you should have already visited the office, met with the practice owner, and arrived at the basic terms of the sale, including the purchase price and a mutually workable closing date timeframe. Often, the office staff is unaware that the dental practice is for sale, so confidentiality and discretion in discussions with third parties are imperative.

When performing due diligence on a dental practice acquisition, what top items do we look at?

Practice Collections

Show me the money!

Some due diligence procedures should include reviewing dental practice tax returns filed for the last three to four years. Additional steps should also include reviewing bank statements and comparing deposits for the year to the tax returns and financial statements provided, keeping an eye out for unusual non-recurring deposits and items.

Practice Expenses

Mind the store!

What does this practice cost to operate, and what can you reasonably expect to earn? Certain costs are variable, and certain expenses are fixed. Focus on analyzing the costs that will be difficult to manage. An expensive lease can hinder profitability, locking the practice for a fixed term. A bad lease might be a non-starter and kill the deal before further acquisition efforts are made. Employee costs can easily become overwhelming in a long-held practice. Be mindful of hourly wages or salaries and employee benefits. What the seller might be able to afford to pay staff may not be what a new practice owner can afford, along with a bank note to pay. Employees do not take kindly to a reduction of pay or benefits in a transition.  You’re not looking for a mutiny on Day One!

Remaining Terms of The Office Lease

Pack your bags!

How many years remain on the lease? Do you feel like moving next year? If there are less than three years remaining on the lease or a new lease can’t be negotiated prior to closing, you may need to pass on this practice.  Typically, the banks will not lend with insufficient lease terms. Check all terms of the lease and the afforded rights for it to be

assigned to an acquiring practice owner.

Insurance Plans are Accepted, and Office Fee Schedules

$50 cleaning? I don’t think so!

Don’t laugh. We have seen it. It is very important to review the insurance plans accepted. When a hygienist can cost more than $60 per hour with payroll taxes and benefits, make sure you’re not losing money with every patient you see. A careful review of the fee schedules for the accepted top three plans should be performed. Many older dentists fear dropping certain underpaying plans and have continued to build a larger patient base on sub-par paying plans, even as other local providers have dropped the plans.

Associate Contracts

Whose goodwill are you buying?

When a practice employs a dental associate, the patient-doctor relationship sometimes transfers to the dental associate. A review of the associate’s employment contract is vital to protect the asset you are purchasing. Be aware that in the absence of a non-compete agreement between the associate and the practice, nothing can prevent the associate from opening nearby and taking the patients from the practice you want to purchase.

Procedures Currently Performed In-Office and Procedures Referred Out

Opportunities lost or found?

A careful review of the production report by the procedure is crucial in determining if you have discovered a huge opportunity or are purchasing a practice you can’t or choose not to replicate. In other words, if you are not comfortable placing implants and the practice’s collections include a large percentage of implant placement cases, this may not be the practice for you. Immediately, there will be a reduction in collections. Conversely, if the practice is not currently placing implants or refers out all endodontic work and you are skilled at such procedures, you have just discovered a huge opportunity to grow the practice.

As a CPA firm specializing in the dental industry, our dental accountants are skilled at guiding our clients to successful practice acquisitions. Equally as important, we continue to provide industry-specific accounting guidance post-transaction to set our clients up for a rewarding ownership experience. Often referred to as “New Jersey’s most trusted dental accountants,” we strive and succeed to live up to our stellar reputation continuously.  

 

 

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