Paul Naden, the Original Dental CPA

On July 26, 2013 Paul Naden, CPA, JD, decided to join the great dixieland band in the sky. While he was with us, he touched many lives with his humor, wisdom, practical advice and most importantly, his friendship. We have created a page to honor his memory as well as celebrate his life, Remembering Paul Naden.

Trust Dental Practice Valuations to a Certified Valuation Analyst (CVA), or else...

Recently, a wide variety of folks posted information about how to value a dental practice on Dentaltown. I can only say my perspective comes from hundreds (if not thousands) of valuations of practices for purchase.

You can get some really good information from P&Ls, do not ignore them. Always begin with tax returns and support with P&Ls and PM reports. Many tax preparers will lump expenses together for tax preparation - P&Ls will likely show the details.

A quick example: tax returns had office supplies & expenses of around $60k on revenue of around $900k. The broker who was selling eliminated $50k stating "normal" office supplies & expenses should be 1.5%. P&Ls showed dental supplies of $50k and broker missed it. The tax preparer had combined them into one item on the return.

Who wants to tell me how $50k less in profit impacted the asking price?

Production directly impacts overhead, not cash flow. Cash flow is simply the result of collections minus expenses.

Do not ignore production information/reports, they should support tax return collections and provide soooo much more information about how the collections are generated as well as provide clues on unusual overhead stats.

Another quick example: assessing a practice tax return collections were $100k higher than PM reports. As we inquired about the difference we learned seller was earning $100k/year as an independent contractor, in someone else’s practice, an hour away! That income was not related to the practice being sold.

Who wants to tell me how $100k less in profit impacted the asking price?

You see, in both cases the tax returns were truthful, nothing wrong with them, however, they were used to "price" the practice and nothing else was looked at.

Gather your data, analyze it, verify it, support it, verify it again - then confirm it. 

It’s called due diligence!

Tim Lott, CPA, CVA - Equity Member Dental CPAs 

tlott@dentalcpas.com 
www.dentalcpas.com 
www.indcpa.org 
www.twitter.com/dentalcpas 
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Tim Lott, Dental CPA, Writes about the Importance of a Webmaster When Hiking

(As Tim Lott was rambling through the woods - as he often does - he thought of this blog post).

I was enjoying my morning hike today and this question came to me out of nowhere. First let me state unequivocally I have very little knowledge of the intricacies of websites, how they operate and how to maintain them and you’ll learn very quickly that this post has nothing to do with that!

One of the downsides of hiking in the woods on less-traveled trails or deer trails during the summertime are the spider webs. For those that hike a lot, you know what I’m talking about. Sure you can swing your hands out in front of you like you’re power-hiking, however, the feel of webs all over my arms isn’t something I enjoy. Worse, you can simply use your face as your detection device, just keep your mouth closed or you’ll be getting plenty of protein during your hike. What’s the alternative you ask? A webmaster. Whether you’re the first one to hike that morning or blazing your own trail, a good webmaster is a must have when hiking in the woods during the summertime.

I found mine a little over a year ago. It appeared to be recently built and placed near the banks of the Gunpowder River in some shallow water… maybe it was supposed to be there to cure from the manufacturing process. I could tell right away that mine was built by a beaver as it had a mark (think Antiques Roadshow) or marks on the base of the device… and all over it really. It was the perfect weight, had the perfect thickness from base to end and several cleverly placed “knobs” spread along the shaft to allow for better gripping.

The really cool thing about my webmaster is it’s actually multi-functional, it has many other uses. Here’s a list of some of the other uses during your hike:

weed-whacker, bug repellent, defense against the mildly aggressive critter\varmint or pet, frog & snake chaser, brush poker and of course, hiking stick. I would even venture a guess that if you found a sunny spot & you knew your directions (east\west\north\south) you could even tell time with it!

So I encourage all you hikers out there… if you don’t have a webmaster you really need to consider getting one.

Happy Hiking!

For more information, please contact info@dentalcpas.com

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Mistakes Made, Lessons Learned about Dental Office Staff Meetings

This is another guest post from our client Dr. Donald Lurie.

It seems to me that staff meetings and office planning are difficult and at best, one of the areas that I disliked the most.  To carry it a step further, this same planning and meeting is necessary while contemplating retirement, finances, future activities and endeavors and the like.  Again, as I have said before in some of my earlier blogs, the Team of Retirement is an important part of the process. 

I found it difficult to enjoy staff meetings due to the varied personalities that were present on my staff.  It was difficult for them to talk openly in front of their peers and in front of "the boss."  My staff was not large, but extremely qualified and trained - 2 RNs, 1 CRNA, Office Manager, and a secretary.  They were all female and really good people. However, when it came time to verbalize, critique the practice, correct our errors or attitudes or seek ways to "make it better", the room would get quiet and everyone was looking at the floor.  It seems to me that this situation is also carried out many times when having these open and introspective gut-wrenching discussions with the accountants - especially when getting ready for major decisions such as projections, practice evaluation, insurance issues (to join or not),  and even retirement.

I noticed in our staff meetings that it was difficult to be constructive.  The folks felt that there was a criticism of their work or their personality or even their effort.  I sometimes felt, that I was walking on eggs.  Who was working for whom.  How many hours, days, weeks etc... was enough for sickness, vacation, retirement funding and all the mundane aspects of "running the business" of a practice that had nothing to do with that which I signed up for----treating patients. 

Introspective discussion must be had with our advisors.  It is necessary to be open and receptive to ideas and suggestions that might not be what we want to hear.  The timing of retirement may dictate other strategies that were not planned for in the earlier years of practice.  As noted, other priorities (health, money, wife etc.) may have changed.  It is difficult to be criticized in these meetings or to perceive that you are being looked down on.  However, the really good Team of Retirement will not make it a personal attack.  The point is that we must be ready and available to look at our total work and life situation -  tweak it, shape it, and finally own it.  As I have stated in other blogs, this sharing of attitudes, this true meaning of creation of the next profession (Retirement), will  then be filled with anticipation, will be fruitful, and there will be calm and peace. These are just some thoughts, it seems to me.

More Mistakes made and lessons learned next time.

Dr. Donald B. Lurie, DDS

donald.lurie@att.net 

Phone:       717-235-0764

Cell:           410-218-2228

For more information, please contact info@dentalcpas.com

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