Monday, November 14, 2016
Get Your Education On!
Have you ever wondered what you need to know about the financial operations of your practice? Have you ever wondered what you should be looking at and monitoring when it comes to your practice numbers? Well, you can stop wondering! Next month, our very own Lance Jacob will be teaching dentists on Dentaltown about these very issues, and you can learn as well.
Lance prepared a video course for Dentaltown that qualifies for CE, and the topic is “Improving Patient Care by Improving Practice Performance”. Let me tell you a little about it and some of the things you’ll learn.
Viewers of the course will gain some insight on what they need to be looking at when it comes to the operational performance of their practice and how their practice financials can aid in that insight. You’ll learn some of the key performance indicators you should be calculating and how to interpret the results. You’ll learn about what our latest performance statistics showed so you can compare your practice with those results.
Lance will discuss production, production adjustments, collections, production by provider, etc. This will include various revenue ratios you should be looking at and what the typical GP practice looks like as it relates to these ratios.
Lance will also talk about practice overhead for a GP practice and things you need to know about overhead specifics and what our survey results showed about the average overhead statistics for a GP practice.
If you’d like to get your education on, schedule an hour to view the course then login to Dentaltown today and begin learning. Lance's CE course will be available the first week of December.
If you’re not a member of Dentaltown you should be, their motto is “You’ll never have to practice alone again!” Sign up and become a member so you can view this course and many other courses...it’s a one-stop shop for much of your CE needs. The forums board is incredible with forums on just about every practice topic you can think of so you can get feedback from dentists just like you as well as other dental related consultants and experts.
For more information on accessing this CE course or to set up an appointment for a consultation on improving your practice's performance, please give us a call at 844-DENT-CPA, or visit www.dentalcpas.com
About Lance Jacob
Lance Jacob is a Principal with Naden/Lean, LLC. He provides accounting, tax, and consulting services for individuals and businesses which include dentists, other healthcare providers, retail, and equine. With his equine clients, Lance works to ensure they are in compliance with the federal, state, and local taxing authorities with respect to employment, business tax and reporting issues.
Wednesday, November 2, 2016
During my many buyer representation engagements I tend to see some common issues when it comes to practice valuations that sellers could have avoided to help maintain their practice values. Here are some of those areas.
1. Clean Record Keeping:
Remember, buyers and their advisors will be picking over your information, it’s like inviting someone into your home, and you want it to be clean. Your practice books and records should be the same way, clean, easy to read, and at your finger tips. For example, your Quickbooks file should match the tax return numbers and if not to the dollar, pretty darn close and easy to match up.
2. Complete and Accurate Practice Management (PM) Reporting:
Make sure your PM software is current and accurate. You should be recording production, adjustments and collections by provider. Clean up your accounts receivables WELL before you plan on selling.
3. Don’t Coast:
This is one of the worst things a seller can do prior to selling their practice. It decreases dentistry production and therefore, decreases practice revenue which buyers AND bankers do NOT like.
4. Don’t Reduce Your Hygiene Hours:
Let me correct myself, THIS is the worst thing you can do. Not only are you reducing your practice revenue, you’re potentially losing patients as well.
5. Update Office Appearance and Equipment:
Again, just like a house, an outdated décor with old equipment will generally create less excitement with a buyer and less excitement means a reduced offer. Create excitement with your buyers with current décor, updated equipment and a fresh appearance.
6. Overpaid Staff:
Be aware of your staff compensation and make an effort to make sure it stays within “market” for your area. There’s nothing wrong with showing appreciation to your staff with discretionary bonuses, fancy trips, paying for CE travel, etc., however, make sure they’re aware that these are not customary fringes so they don’t come to expect it from their new boss.
7. Inflated Overhead:
Well before you sell, I’m talking 2-3 years ahead of time, begin to evaluate your practice overhead expenses and make sure you’re ONLY spending on things you NEED. I’m not talking about skimping on updated equipment; I’m talking about wasting money on unnecessary supplies, small toys, unnecessary services, etc. Become a good CFO! Profits will drive value most of the time and wasted overhead eats into your profit and will usually drive down the value of the practice.
8. Office Policies and Systems:
Well before you sell, make sure you have excellent operating systems and policies. If you’re not collecting a patient’s portion of the fee at the time of visit, make that change now. If you don’t take credit cards, start taking them. If you’re not running daily, weekly and monthly management reports, start doing so.
9. Track Your Referrals:
At least one year prior to a sale, begin tracking the procedures you refer out every day and be prepared to provide your broker with some really good, accurate information for the prospective buyers.
10. Dont’t Change or Eliminate any PPOs Prior to a Sale:
This can backfire if you begin to see fewer patients even if the revenue stays about the same. In most cases when a practice decides to eliminate PPOs, there’s a transition period where you’ll have holes in the schedule. Those PPO patients that opt NOT to come back for their scheduled recare appointment or follow-up work will in turn cause revenues to be lower for a period of time.
Tim Lott, CPA, CVA has decades of experiences working with dentists at all stages of their careers. He is a regular speaker at study clubs, societies, and dental schools. Tim is a partner at Naden/Lean, of which the Dental CPAs is a division. You can reach Tim at firstname.lastname@example.org (800) 772-1065.