You can find it here.
Send your questions to Tim Lott, CPA, CVA at tlott@dentalcpas.com
For more information or to sign up for our newsletter, please contact arose@dentalcpas.com
Monday, August 31, 2009
Dental Office Design - How Can Your Office Help Patients Heal?
Our friends at Dental Office Interiors have sent us another article. This one is entitled, "How can your office help patients heal?"
You can find it here.
You can find it here.
Thursday, August 27, 2009
How Lighting Affects Dental Patients - Dental Office Design
Our friends at Dental Office Designs have put out an article on how lighting affects patients.
You can read the article here.
You can read the article here.
Send your questions to Tim Lott, CPA, CVA at tlott@dentalcpas.com
For more information or to sign up for our newsletter, please contact arose@dentalcpas.com
Wednesday, August 26, 2009
Dental Office Purchase Questions - 100% Medicaid
I am planning to acquire a dental office which is a 100% medicaid practice. I have been handed over a copy of the P&S by the broker. I took some time of to go through the contents of the P&S and had a few questions to put forth before you.
What is a fair compensation to be paid to the seller, if he would work with me during transition?
35-40% of their collections or 25-30% of their prod (since it's medicaid), depending on how many days they work you'll have to decide on their professional expenses like malpractices, dues, licenses, ce, etc. basically treat them like you would want to be treated as an assoc + a little premium on the %.
What are key points to be considered before we sign a non-compete?
One key point = consult a dental attorney! See the recent post by Jason Wood.
What are key points to be considered before we sign a Restrictive covenant?
One key point = consult a dental attorney! See the recent post by Jason Wood.
What are key points to be considered before we set a formula for AR collection?
Not sure what you mean, however, one key point = consult a dental attorney! See the recent post by Jason Wood.
What happens to employee benefits like vacation, sick leave, CE etc after I take them over for the current year?
Depends on what you negotiate, generally the seller is responsible for resolving those liabilities and you as the buyer will have to decide what you'll want to offer them when you hire them. That said I bet Jason Wood has some GREAT advice.
Your valuable inputs will be of great help since I am going through P&S. I am also hiring an attorney for the same, but I feel personal experiences makes the difference.
Thanks in advance.
In my opinion your questions are very specific and need specific advice, NOT opinions based on what others have experienced.....unless those experiences come from a dental attorney! All these are legal issues as they involve a legal agreement.
Good luck.
This first appeared on Dentaltown.
What is a fair compensation to be paid to the seller, if he would work with me during transition?
35-40% of their collections or 25-30% of their prod (since it's medicaid), depending on how many days they work you'll have to decide on their professional expenses like malpractices, dues, licenses, ce, etc. basically treat them like you would want to be treated as an assoc + a little premium on the %.
What are key points to be considered before we sign a non-compete?
One key point = consult a dental attorney! See the recent post by Jason Wood.
What are key points to be considered before we sign a Restrictive covenant?
One key point = consult a dental attorney! See the recent post by Jason Wood.
What are key points to be considered before we set a formula for AR collection?
Not sure what you mean, however, one key point = consult a dental attorney! See the recent post by Jason Wood.
What happens to employee benefits like vacation, sick leave, CE etc after I take them over for the current year?
Depends on what you negotiate, generally the seller is responsible for resolving those liabilities and you as the buyer will have to decide what you'll want to offer them when you hire them. That said I bet Jason Wood has some GREAT advice.
Your valuable inputs will be of great help since I am going through P&S. I am also hiring an attorney for the same, but I feel personal experiences makes the difference.
Thanks in advance.
In my opinion your questions are very specific and need specific advice, NOT opinions based on what others have experienced.....unless those experiences come from a dental attorney! All these are legal issues as they involve a legal agreement.
Good luck.
This first appeared on Dentaltown.
Send your questions to Tim Lott, CPA, CVA at tlott@dentalcpas.com
For more information or to sign up for our newsletter, please contact arose@dentalcpas.com
Friday, August 21, 2009
Dental Associate Independent Contractor or W-2 Employee. Which is Best?
I am considering a job where the employer typically has paid the associate as an IC but he would consider an employee situation. At this point I think being an employee would be better for me for the obvious reasons, but I've got to think if the increase in % of my payment is high enough it can actually be better financially to be an IC.
If I get paid as an employee it will be at x% of collections, whereas if I'm an IC it will be at x% production. There has got to be a break even point where if my % is high enough as an IC it would be better financially. So I'm trying to figure out where those %s need to be for me to even consider being an IC.
Can someone detail to me the expenses that I would incur as an independent contractor besides the extra ~7.6% in taxes for social security and medicare?? I figured I will need to spend more on a CPA to figure my quarterly numbers. I need health insurance so as an IC I guess I'm on the hook for that on my own. I'm assuming I would need my own malpractice insurance. Any other expenses I need to take into account? Does anyone know the % increase that would be required to make being an IC worthwhile? I'm just thinking that 45% of production as an IC may be better than 35% of collections in an office with a 95% collection rate as an employee. Those are ficitious numbers btw.
Sorry if that was vague, thanks in advance for any help-
I'm confused as to why there's a difference between the basis of your revenue (prod or collections) based upon whether or not you're an IC or an EE, is that what the employer is offering? Ask them why.
It seems to me you want to resolve whether you get paid on prod or collection, THEN discuss the % you will get paid based upon an IC or EE.
Generally speaking, just about any expense you'll "need" as an IC, you'll need as an employee, the only real difference is how they're treated income taxwise IF YOU have to pay them from your pocket and if the "employer" can pay them - depending on how they treat you. Just be aware that almost any expense an IC pays & can deduct, an employer can pay on your behalf and get the same deduction AND you can keep both parties in the same, if not BETTER cash position.
Bottom line is you need to discuss your specific issues with a CPA to assist you in making the right choice for you.
This first appeared on Dentaltown.
If I get paid as an employee it will be at x% of collections, whereas if I'm an IC it will be at x% production. There has got to be a break even point where if my % is high enough as an IC it would be better financially. So I'm trying to figure out where those %s need to be for me to even consider being an IC.
Can someone detail to me the expenses that I would incur as an independent contractor besides the extra ~7.6% in taxes for social security and medicare?? I figured I will need to spend more on a CPA to figure my quarterly numbers. I need health insurance so as an IC I guess I'm on the hook for that on my own. I'm assuming I would need my own malpractice insurance. Any other expenses I need to take into account? Does anyone know the % increase that would be required to make being an IC worthwhile? I'm just thinking that 45% of production as an IC may be better than 35% of collections in an office with a 95% collection rate as an employee. Those are ficitious numbers btw.
Sorry if that was vague, thanks in advance for any help-
I'm confused as to why there's a difference between the basis of your revenue (prod or collections) based upon whether or not you're an IC or an EE, is that what the employer is offering? Ask them why.
It seems to me you want to resolve whether you get paid on prod or collection, THEN discuss the % you will get paid based upon an IC or EE.
Generally speaking, just about any expense you'll "need" as an IC, you'll need as an employee, the only real difference is how they're treated income taxwise IF YOU have to pay them from your pocket and if the "employer" can pay them - depending on how they treat you. Just be aware that almost any expense an IC pays & can deduct, an employer can pay on your behalf and get the same deduction AND you can keep both parties in the same, if not BETTER cash position.
Bottom line is you need to discuss your specific issues with a CPA to assist you in making the right choice for you.
This first appeared on Dentaltown.
Send your questions to Tim Lott, CPA, CVA at tlott@dentalcpas.com
For more information or to sign up for our newsletter, please contact arose@dentalcpas.com
Tuesday, August 18, 2009
The Ikea Way: The Wrong Way To Buy Or Sell Your Dental Practice
I came across this article about buying/selling dental practices from our friends at Wood and Delgado (dental attorneys) and thought it to be valuable.
“Come to IKEA where you can afford brand new furniture at discount prices.” Your jaw hangs loose as you see the price pop up next to that new dining room table. You think to yourself, “I can actually afford that.” You find yourself running out the door to purchase the table. You find the table and only quickly stop to think, “This box doesn’t look like a table to me”, as you hand over your credit card to the cashier. However, the thrill of being able to eat on an actual table quickly pushes the thought out of your mind as you race home to open up the box to see your table. As you tear open the impossibly-taped-together box the choir singing in your head quickly stops as you stare at pieces of wood with a book the size of an encyclopedia that reads, “Assembling your new dining room table!” Undaunted, you turn to page one. Of course, three hours later when you are staring at a 3-legged “thing” and frantically turning to Appendix “C” to see where you went wrong it hits you that this might not have been the best idea. At the end of the weekend with your project finally completed you realize you were able to get a new dining room table for under $200 but it took you six hours to assemble, your weekend was ruined and you still have 3 screws left over.
Let’s be honest, we’ve all suffered through the IKEA phase of life. Symptoms include: pulling up the couch cushions to look for loose change, ordering off of the “value” menu at a fast food place, using milk crates as a “perfect” coffee table in the apartment you somehow manage to just pay the rent on every month. However, by now you have probably moved on to delivered and pre-assembled furniture. You are past the do-it-yourself phase of your life. So why are you still trying to buy and sell your most important business asset by yourself?
When our law firm receives a call from a dentist who is either trying to buy or sell a dental practice, our first question is, “Who is on your team?” Quite often the reply is, “Team? What team?” While it may seem strange, this is how you should approach buying or selling a dental practice, with a team mentality. Purchasing or selling a dental practice has too many unique areas that are instrumental to the life of your practice or to your retirement, which an untrained eye will not be able to see or even understand. Brokers, CPA’s, attorneys and other professionals are people who you want on your team, and not all teams are equal. While any broker, CPA or attorney can help you with your purchase or sale, a unique subset of these professionals have crafted their professional practices around helping dentists. These professionals would be your All-Stars, the ones who know the industry inside-and-out, who don’t have to “learn on the job” and can quickly help you realize your dream. Below are some of the reasons why having these professionals on your team can help you realize your dream.
DENTAL BROKERS
There is no better person to have on your team than a dental practice broker. These professionals have often spent years (if not decades) in the dental industry, they know everyone and have a long list of buyers and sellers to help you purchase or sell your dental practice to just the right person. Think of them as your team captain. For sellers, they can appraise the value of your practice quickly, market your practice to a wide array of potential buyers, give you expert advice on how to get the most money out of your dental practice and help facilitate the transaction. Although expensive, most dental practice brokers are worth their weight in gold and can help you close on your transaction. Our law firm has seen far too many do-it-yourselfers fail, time after time, when trying to sell their dental practice without utilizing a dental broker. For buyers, calling a dental practice broker will put you in touch with a long list of sellers along with an inventory to fit every budget. As a buyer, you can be assured that the dental broker will be working for you as well, because most of the dental practice brokers have a dual agency to both the buyer and the seller. One note of caution in finding a broker to sell your dental practice: make sure it is a broker who specializes in selling dental practices and not a general business broker. Unfortunately, general business brokers do not have the expertise required to sell a dental practice and will provide you with a standard business purchase agreement which will not take into account the unique nature of a dental practice, i.e. uncompleted dental work, restrictive covenants, appropriate representations and warranties, redo work, etc. Using a general business broker will always be far less satisfactory than using a dental broker.
DENTAL CPAs
Although you may already have a CPA who works for you, if you are looking at purchasing or selling a dental practice, you may want to enlist a CPA who specializes in helping dentists. As a seller, they can save you thousands of dollars in taxes by using the proper ratios for purchase price allocations, thus making them worth almost any fee you may pay them. As a buyer, a dental CPA can also save you thousands of dollars in taxes by using the proper ratios for purchase price allocations because of the heavy use of equipment within dental practices and changes within the tax code that many general CPAs are unfamiliar with. Having your dental CPA review the books and records of the dental practice, the tax returns for the last 2 years and profit and loss statements will further protect you from an unscrupulous seller. Furthermore, when purchasing a dental practice you may want to enlist the services of a dental CPA to help you with all of your business needs since owning and running a dental practice is much different than running a general business. Dental CPAs have spent years helping dentists with day-to-day business needs and they know how to best run your payroll department or to help you receive a deduction for that new piece of equipment that you have been eyeing for the past six months. Out of all your advisors, your dental CPA will be the one who is around the longest, helping you on a yearly basis with taxes and other business issues.
DENTAL ATTORNEYS
Although there are thousands of attorneys to choose from, very few have tailored their practice on a full-time basis around helping dentists in their business needs. Think of your attorney as your catcher or goalie: they take everything in but they stop the bad things from happening. As a seller, enlisting an attorney to review your purchase agreement is a way to protect you in your retirement or at your new dental practice which you are acquiring. There are many areas within a purchase agreement which can hurt your chances of continuing to practice dentistry or can leave you “on the hook” for years to come due to issues like the past treatment of patients, etc. You should also have the attorney review your lease and draft an assignment of the lease to give to your landlord. Generally, you will remain liable under your lease for the life of your lease, which could be another 10-15 years! However, a dental attorney will try to remove this liability by speaking with the landlord and inserting a provision into the assignment of the lease relieving you of liability after a specified period of time. As a buyer, a dental attorney helps you primarily on two fronts, the purchase agreement and the lease. In a purchase agreement, the dental attorney will try to protect your new investment as much as possible, making sure the seller isn’t hiding any problems in the dental practice and insuring that the seller won’t compete with you after the sale of the practice. With the lease, the dental attorney will try to protect your goodwill and your leasehold interest (your lease) as much as possible since these are the most valuable assets you have in your dental practice. Unfortunately, many landlords don’t understand what they have in their lease and many of these provisions can have a significant effect on the value of your dental practice when you go to resell it!
Although this brief article only mentions three types of professionals that can help you realize your dream, there are other professionals within the dental community that can help you just as much. Lenders who specialize in providing loans to dentists will generally provide a better rate then regular banks or other lending institutions, practice consultants can show you areas within your practice which you are not using to their full potential which can help you to make more money, as well as other professionals who have spent years with dentists helping to perfect the ownership or sale of a dental practice. The most important thing to understand when thinking of buying or selling a dental practice is that you are not alone. Unfortunately, our law firm receives too many calls from frantic dentists who have seen their dreams go up in smoke simply because they were trying to accomplish their dream on their own. Using advisors to help you in this stage of your professional life will be worth the extra cost to you, especially if you use professionals who are specialists in the dental community. Remember, the do-it-yourself mentality usually ends with a headache and an unrealized dream. Besides, who really wants to know what a slug nut is anyway, and if you already do I have a three piece “thing” sitting in my dining room I need you to fix for me.
Jason P. Wood, B.A., J.D. and Patrick J. Wood, B.A., J.D.Jason is an associate attorney in the law firm of Wood & Delgado, and Patrick is the founder and senior partner of Wood & Delgado, a law firm which specializes in representing dentists for their business transaction needs. Wood & Delgado represents dentists in California, Nevada and Colorado and can be reached at (800) 499-1474 or by email at jason@dentalattorneys.com or pat@dentalattorneys.com.
“Come to IKEA where you can afford brand new furniture at discount prices.” Your jaw hangs loose as you see the price pop up next to that new dining room table. You think to yourself, “I can actually afford that.” You find yourself running out the door to purchase the table. You find the table and only quickly stop to think, “This box doesn’t look like a table to me”, as you hand over your credit card to the cashier. However, the thrill of being able to eat on an actual table quickly pushes the thought out of your mind as you race home to open up the box to see your table. As you tear open the impossibly-taped-together box the choir singing in your head quickly stops as you stare at pieces of wood with a book the size of an encyclopedia that reads, “Assembling your new dining room table!” Undaunted, you turn to page one. Of course, three hours later when you are staring at a 3-legged “thing” and frantically turning to Appendix “C” to see where you went wrong it hits you that this might not have been the best idea. At the end of the weekend with your project finally completed you realize you were able to get a new dining room table for under $200 but it took you six hours to assemble, your weekend was ruined and you still have 3 screws left over.
Let’s be honest, we’ve all suffered through the IKEA phase of life. Symptoms include: pulling up the couch cushions to look for loose change, ordering off of the “value” menu at a fast food place, using milk crates as a “perfect” coffee table in the apartment you somehow manage to just pay the rent on every month. However, by now you have probably moved on to delivered and pre-assembled furniture. You are past the do-it-yourself phase of your life. So why are you still trying to buy and sell your most important business asset by yourself?
When our law firm receives a call from a dentist who is either trying to buy or sell a dental practice, our first question is, “Who is on your team?” Quite often the reply is, “Team? What team?” While it may seem strange, this is how you should approach buying or selling a dental practice, with a team mentality. Purchasing or selling a dental practice has too many unique areas that are instrumental to the life of your practice or to your retirement, which an untrained eye will not be able to see or even understand. Brokers, CPA’s, attorneys and other professionals are people who you want on your team, and not all teams are equal. While any broker, CPA or attorney can help you with your purchase or sale, a unique subset of these professionals have crafted their professional practices around helping dentists. These professionals would be your All-Stars, the ones who know the industry inside-and-out, who don’t have to “learn on the job” and can quickly help you realize your dream. Below are some of the reasons why having these professionals on your team can help you realize your dream.
DENTAL BROKERS
There is no better person to have on your team than a dental practice broker. These professionals have often spent years (if not decades) in the dental industry, they know everyone and have a long list of buyers and sellers to help you purchase or sell your dental practice to just the right person. Think of them as your team captain. For sellers, they can appraise the value of your practice quickly, market your practice to a wide array of potential buyers, give you expert advice on how to get the most money out of your dental practice and help facilitate the transaction. Although expensive, most dental practice brokers are worth their weight in gold and can help you close on your transaction. Our law firm has seen far too many do-it-yourselfers fail, time after time, when trying to sell their dental practice without utilizing a dental broker. For buyers, calling a dental practice broker will put you in touch with a long list of sellers along with an inventory to fit every budget. As a buyer, you can be assured that the dental broker will be working for you as well, because most of the dental practice brokers have a dual agency to both the buyer and the seller. One note of caution in finding a broker to sell your dental practice: make sure it is a broker who specializes in selling dental practices and not a general business broker. Unfortunately, general business brokers do not have the expertise required to sell a dental practice and will provide you with a standard business purchase agreement which will not take into account the unique nature of a dental practice, i.e. uncompleted dental work, restrictive covenants, appropriate representations and warranties, redo work, etc. Using a general business broker will always be far less satisfactory than using a dental broker.
DENTAL CPAs
Although you may already have a CPA who works for you, if you are looking at purchasing or selling a dental practice, you may want to enlist a CPA who specializes in helping dentists. As a seller, they can save you thousands of dollars in taxes by using the proper ratios for purchase price allocations, thus making them worth almost any fee you may pay them. As a buyer, a dental CPA can also save you thousands of dollars in taxes by using the proper ratios for purchase price allocations because of the heavy use of equipment within dental practices and changes within the tax code that many general CPAs are unfamiliar with. Having your dental CPA review the books and records of the dental practice, the tax returns for the last 2 years and profit and loss statements will further protect you from an unscrupulous seller. Furthermore, when purchasing a dental practice you may want to enlist the services of a dental CPA to help you with all of your business needs since owning and running a dental practice is much different than running a general business. Dental CPAs have spent years helping dentists with day-to-day business needs and they know how to best run your payroll department or to help you receive a deduction for that new piece of equipment that you have been eyeing for the past six months. Out of all your advisors, your dental CPA will be the one who is around the longest, helping you on a yearly basis with taxes and other business issues.
DENTAL ATTORNEYS
Although there are thousands of attorneys to choose from, very few have tailored their practice on a full-time basis around helping dentists in their business needs. Think of your attorney as your catcher or goalie: they take everything in but they stop the bad things from happening. As a seller, enlisting an attorney to review your purchase agreement is a way to protect you in your retirement or at your new dental practice which you are acquiring. There are many areas within a purchase agreement which can hurt your chances of continuing to practice dentistry or can leave you “on the hook” for years to come due to issues like the past treatment of patients, etc. You should also have the attorney review your lease and draft an assignment of the lease to give to your landlord. Generally, you will remain liable under your lease for the life of your lease, which could be another 10-15 years! However, a dental attorney will try to remove this liability by speaking with the landlord and inserting a provision into the assignment of the lease relieving you of liability after a specified period of time. As a buyer, a dental attorney helps you primarily on two fronts, the purchase agreement and the lease. In a purchase agreement, the dental attorney will try to protect your new investment as much as possible, making sure the seller isn’t hiding any problems in the dental practice and insuring that the seller won’t compete with you after the sale of the practice. With the lease, the dental attorney will try to protect your goodwill and your leasehold interest (your lease) as much as possible since these are the most valuable assets you have in your dental practice. Unfortunately, many landlords don’t understand what they have in their lease and many of these provisions can have a significant effect on the value of your dental practice when you go to resell it!
Although this brief article only mentions three types of professionals that can help you realize your dream, there are other professionals within the dental community that can help you just as much. Lenders who specialize in providing loans to dentists will generally provide a better rate then regular banks or other lending institutions, practice consultants can show you areas within your practice which you are not using to their full potential which can help you to make more money, as well as other professionals who have spent years with dentists helping to perfect the ownership or sale of a dental practice. The most important thing to understand when thinking of buying or selling a dental practice is that you are not alone. Unfortunately, our law firm receives too many calls from frantic dentists who have seen their dreams go up in smoke simply because they were trying to accomplish their dream on their own. Using advisors to help you in this stage of your professional life will be worth the extra cost to you, especially if you use professionals who are specialists in the dental community. Remember, the do-it-yourself mentality usually ends with a headache and an unrealized dream. Besides, who really wants to know what a slug nut is anyway, and if you already do I have a three piece “thing” sitting in my dining room I need you to fix for me.
Jason P. Wood, B.A., J.D. and Patrick J. Wood, B.A., J.D.Jason is an associate attorney in the law firm of Wood & Delgado, and Patrick is the founder and senior partner of Wood & Delgado, a law firm which specializes in representing dentists for their business transaction needs. Wood & Delgado represents dentists in California, Nevada and Colorado and can be reached at (800) 499-1474 or by email at jason@dentalattorneys.com or pat@dentalattorneys.com.
Send your questions to Tim Lott, CPA, CVA at tlott@dentalcpas.com
For more information or to sign up for our newsletter, please contact arose@dentalcpas.com
Monday, August 17, 2009
Lack of Planning Can Lead to Dental Practice Tax Surprises - Do You Like Surprises?
DEPENDS ON THE SURPRISE DOESN'T IT ?
This time of year is when we go through our "round" of mid-year meetings with the majority of our clients. These are multi-purpose meetings where we discuss many aspects, from the performance of their practices, to projecting the remainder of the year, to the income tax impact to whatever the client wantsneeds to discuss with us.
One of our primary goals with all of our clients is to help them avoid the bad surprises, you know, a surprise like finding out in late March or early April that you owe $25,000 in income taxes and you had no idea. Once you're in that position there's little else you can do to avoid it and it leaves a very bad taste in your mouth.
There is a phrase I use in many of my lectures, i'm not sure where I heard it, "failing to plan is planning to fail". We believe very strongly that as business owners, you must always maintain a "planning" mindset. Now is the time every practice owner should be evaluating where they are with respect to their practice results, where they're going, areas they need to improve upon in the next 12-24 months and areas that need immediate attention.
Make the time to review these things and to get a handle on your financial situation, both practice and personal and plan accordingly. Don't wait until it's too late to get one of those surprises that none of us like to get.
From an income tax perspective, between now and the end of the year, run the numbers so you can decide what you want your income tax picture to look like and take the necessary steps to ensure that you've put yourself in the best possible tax position that's right for you and your situation.
Do you like Surprises? If not do something about it.
This first appeared on NewDocs.
This time of year is when we go through our "round" of mid-year meetings with the majority of our clients. These are multi-purpose meetings where we discuss many aspects, from the performance of their practices, to projecting the remainder of the year, to the income tax impact to whatever the client wantsneeds to discuss with us.
One of our primary goals with all of our clients is to help them avoid the bad surprises, you know, a surprise like finding out in late March or early April that you owe $25,000 in income taxes and you had no idea. Once you're in that position there's little else you can do to avoid it and it leaves a very bad taste in your mouth.
There is a phrase I use in many of my lectures, i'm not sure where I heard it, "failing to plan is planning to fail". We believe very strongly that as business owners, you must always maintain a "planning" mindset. Now is the time every practice owner should be evaluating where they are with respect to their practice results, where they're going, areas they need to improve upon in the next 12-24 months and areas that need immediate attention.
Make the time to review these things and to get a handle on your financial situation, both practice and personal and plan accordingly. Don't wait until it's too late to get one of those surprises that none of us like to get.
From an income tax perspective, between now and the end of the year, run the numbers so you can decide what you want your income tax picture to look like and take the necessary steps to ensure that you've put yourself in the best possible tax position that's right for you and your situation.
Do you like Surprises? If not do something about it.
This first appeared on NewDocs.
Send your questions to Tim Lott, CPA, CVA at tlott@dentalcpas.com
For more information or to sign up for our newsletter, please contact arose@dentalcpas.com
Wednesday, August 12, 2009
Can I be Your Friend? The Risk of Being a Professional on a Public Social Network - Dan Marut, DMD
This is a guest blog entry from our Dan Marut, DMD, founder of www.newdocs.com a social networking site for dentists.
“Can I be your friend?” seems like a rather innocuous question. But, as a professional in the world of public social networking, what you answer may have lasting effects.
By now most of us have heard the buzz about public social networking sites like Facebook. Many have already joined and are participating on them, making “friends” and connecting with others on the network. Online social networks are powerful software tools that allow humans to take our need for connection and reach out far across time and space. The popularity of these tools has penetrated deep into the lives of people everywhere, both personally and professionally. While increased connection with humanity is a good thing, there are many real risks and complex issues associated with the mixing of personal and professional lives.
Facebook, the most popular public social network on the Web, has a myriad of tools that allow you to find and connect with others across the globe. You are usually guaranteed to find (or be found by) someone you know using the site. Are the people you know who use Facebook personal friends? Professional friends? Both? “Why does it matter?” you may ask.
As a professional with a personal life, what you do and how you behave reflects upon you and your business. In the offline world, our personal lives involve pursuing our passions, hobbies, religion, politics, family, friends, etc. You know the saying, “Never discuss politics or religion at the office. Save it for your personal life.” On a public social network the line between professional and personal is blurred. Your life can become an open book visible by many and, of course, everyone on your “friend” list. This is why the question, “Can I be your friend?” or sending and accepting friend invites is so important.
Here’s a true story I received from a dentist friend in Florida: He, like many others, has a Facebook account. He uses it to stay in touch with friends and family. One day, he received a “friend request” from a patient. The patient was not a friend outside of the office. My dentist friend thought about what he should do and decided to decline the request. The next week, he received a call from the patient asking to transfer his records to another office. Apparently, the patient was offended his request was not accepted. The intent of the doctor was not to offend, but to only use the public site for personal purposes.
The next week I received a message from another doc in California who was using Facebook not just for personal reasons, but also to set up a “fan page” for her office in order to market her services. It turns out a disgruntled patient posted some unsettling comments on the office “fan page” that were not seen until another patient contacted her about it. The doc immediately disabled the “fan page.”
Another disturbing trend is the ability for public social networks to use your photo and images for ads and third-party advertising campaigns. That’s right, your photo can appear in an ad campaign for some company you may never have heard of, without you even knowing it! These are just some of the real-world complexities and risks associated with using a public social network as a professional.
Even if you take precautions and keep a low profile, many times a “friend” of yours may post a picture of you and tag the picture with your name. (A tagged picture says who on the network is in the picture). Are there any photos of you out there you would not want your professional colleagues or patients to see? This is something to consider when entering and using a public social network. It may seem one solution would be to have two accounts on a public social network, one for personal use and one for professional use. However, according to Facebook, “maintaining multiple accounts is a violation of Facebook's Terms of Use.”
Many associations and organizations we belong to as professionals use public social networks to create “groups” to encourage communication among members. While the intent is to enhance professional communication for the benefit of the membership and the association as a whole, the risk of mixing the personal with the professional is ever present.
Social networks, whether public or professional, are powerful tools. An understanding of how they can be used most effectively is paramount to maintaining a safe, low-risk online experience in all aspects of your life.
Dan Marut, DMD, seeing the need for a professional social network, founded NewDocs.com, the professional social network for dentistry. Dr. Marut and his company are available to answer any questions about the social networking phenomenon and assist associations and organizations in establishing their own professional networks. He can be reached at DanMarutDMD@newdocs.com or just find him on NewDocs. He’ll become your 1st “professional” friend!
“Can I be your friend?” seems like a rather innocuous question. But, as a professional in the world of public social networking, what you answer may have lasting effects.
By now most of us have heard the buzz about public social networking sites like Facebook. Many have already joined and are participating on them, making “friends” and connecting with others on the network. Online social networks are powerful software tools that allow humans to take our need for connection and reach out far across time and space. The popularity of these tools has penetrated deep into the lives of people everywhere, both personally and professionally. While increased connection with humanity is a good thing, there are many real risks and complex issues associated with the mixing of personal and professional lives.
Facebook, the most popular public social network on the Web, has a myriad of tools that allow you to find and connect with others across the globe. You are usually guaranteed to find (or be found by) someone you know using the site. Are the people you know who use Facebook personal friends? Professional friends? Both? “Why does it matter?” you may ask.
As a professional with a personal life, what you do and how you behave reflects upon you and your business. In the offline world, our personal lives involve pursuing our passions, hobbies, religion, politics, family, friends, etc. You know the saying, “Never discuss politics or religion at the office. Save it for your personal life.” On a public social network the line between professional and personal is blurred. Your life can become an open book visible by many and, of course, everyone on your “friend” list. This is why the question, “Can I be your friend?” or sending and accepting friend invites is so important.
Here’s a true story I received from a dentist friend in Florida: He, like many others, has a Facebook account. He uses it to stay in touch with friends and family. One day, he received a “friend request” from a patient. The patient was not a friend outside of the office. My dentist friend thought about what he should do and decided to decline the request. The next week, he received a call from the patient asking to transfer his records to another office. Apparently, the patient was offended his request was not accepted. The intent of the doctor was not to offend, but to only use the public site for personal purposes.
The next week I received a message from another doc in California who was using Facebook not just for personal reasons, but also to set up a “fan page” for her office in order to market her services. It turns out a disgruntled patient posted some unsettling comments on the office “fan page” that were not seen until another patient contacted her about it. The doc immediately disabled the “fan page.”
Another disturbing trend is the ability for public social networks to use your photo and images for ads and third-party advertising campaigns. That’s right, your photo can appear in an ad campaign for some company you may never have heard of, without you even knowing it! These are just some of the real-world complexities and risks associated with using a public social network as a professional.
Even if you take precautions and keep a low profile, many times a “friend” of yours may post a picture of you and tag the picture with your name. (A tagged picture says who on the network is in the picture). Are there any photos of you out there you would not want your professional colleagues or patients to see? This is something to consider when entering and using a public social network. It may seem one solution would be to have two accounts on a public social network, one for personal use and one for professional use. However, according to Facebook, “maintaining multiple accounts is a violation of Facebook's Terms of Use.”
Many associations and organizations we belong to as professionals use public social networks to create “groups” to encourage communication among members. While the intent is to enhance professional communication for the benefit of the membership and the association as a whole, the risk of mixing the personal with the professional is ever present.
Social networks, whether public or professional, are powerful tools. An understanding of how they can be used most effectively is paramount to maintaining a safe, low-risk online experience in all aspects of your life.
Dan Marut, DMD, seeing the need for a professional social network, founded NewDocs.com, the professional social network for dentistry. Dr. Marut and his company are available to answer any questions about the social networking phenomenon and assist associations and organizations in establishing their own professional networks. He can be reached at DanMarutDMD@newdocs.com or just find him on NewDocs. He’ll become your 1st “professional” friend!
For more information or to sign up for our newsletter, please contact arose@dentalcpas.com
Friday, August 7, 2009
Dental Overhead that Should be Monitored Monthly
If you are just getting started, what are the top 5 or 10 things to measure?
It’s really not that difficult to prepare your own monthly monitors to track the key statistics of your office so you can watch out for trends, both positive and negative. I know some offices do it weekly, I just caution them that trends in such a short period of time can be misleading and difficult to draw any real conclusions from.
On the financial performance side of things, on a monthly or quarterly basis:
1. Gross production, adjustments & collections by provider-(do this monthly)
2. Month end aged A/R balances
3. Hygiene gross production vs. hygeine compensation
4. Percentage of staff compensation to revenue
5. Percentage of dental supplies and lab to revenue
6. Percentage of total overhead to revenue (excl depreciation & interest expense for new practices)
7. Percentage of actual collections to adjusted prod (your collection percentage)
8. Percentage of adjusted production to gross production (or percentage of production adjustments to gross production)
9. Ratio of doctor’s production to hygiene production
10. Monthly net cash flow
This first appeared on New Docs.
It’s really not that difficult to prepare your own monthly monitors to track the key statistics of your office so you can watch out for trends, both positive and negative. I know some offices do it weekly, I just caution them that trends in such a short period of time can be misleading and difficult to draw any real conclusions from.
On the financial performance side of things, on a monthly or quarterly basis:
1. Gross production, adjustments & collections by provider-(do this monthly)
2. Month end aged A/R balances
3. Hygiene gross production vs. hygeine compensation
4. Percentage of staff compensation to revenue
5. Percentage of dental supplies and lab to revenue
6. Percentage of total overhead to revenue (excl depreciation & interest expense for new practices)
7. Percentage of actual collections to adjusted prod (your collection percentage)
8. Percentage of adjusted production to gross production (or percentage of production adjustments to gross production)
9. Ratio of doctor’s production to hygiene production
10. Monthly net cash flow
This first appeared on New Docs.
Send your questions to Tim Lott, CPA, CVA at tlott@dentalcpas.com
For more information or to sign up for our newsletter, please contact arose@dentalcpas.com
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